Article in tonight's Seattle Times re: CHTR IPO:
seattletimes.com
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Posted at 12:51 p.m. PST; Tuesday, November 9, 1999
ALLEN'S CHARTER IPO RAISES $3.23 BILLION;
stock edges up
by Seattle Times staff and news services
The cachet of Microsoft co-founder Paul Allen helped sell 170 million shares, worth $3.23 billion, of cable-TV operator Charter Communciations and give the stock an 18 percent boost in its first day of trading.
The stock of St. Louis-based Charter was priced at $19 a share and rose $3.438 to $22.438 in late trading today on the Nasdaq Stock Market. The stock, which trades under the symbol CHTR, was the most active in the U.S. market today, with 110 million shares trading hands.
Charter, founded by billionaire Allen, is the nation's fourth-largest cable operator based on pending acquisitions.
"They have a set of Web properties that can be put into a broadband infrastructure, and that's where (the industry) is going. It's a cable company on steroids," said Tom Taulli, an analyst with Internet.com.
Broadband is the term to describe the capacity of lines to carry Internet, interactive TV and other electronic services.
Other analysts, including Bruce Leichtman, media and entertainment director at the Yankee Group, see promise in both a broadband future and Allen's involvement.
"The perception by the public is that Paul Allen is smart money," said Ben Holmes, prident of ipoPros.com, a Boulder, Colo., research firm.
Allen, who co-founded Microsoft with Bill Gates, is turning to the public markets to pay down debt and finance part of the $13 billion in cable acquisitions Charter has announced this year.
Allen, who said he'd also make a $750 million investment in the company along with the investors, will retain majority control through his Class B shares, which have more voting power than the Class A shares the company is putting on the market.
Like Charter, the nation's other big operators, such as AT&T, Cablevision Systems and Cox Communications, have been acquiring cable systems this year in an effort to build up large regional groupings of networks.
They believe a strong regional presence is essential to marketing and delivering new services from digital cable to telephone service more efficiently.
Some analysts said the Charter offering could set the stage for a new round of the kind of large acquisitions that have characterized the cable industry this year.
"Within 12 to 18 months, Charter could potentially make a run at a larger cable company," CIBC World Markets analyst Aryeh Bourkoff said. "But that's clearly predicated on an increase in Charter's market value."
Information from Bloomberg News and Seattle Times technology reporter Gordon Black is included in this report.
Gordon Black: 206-464-8557. E-mail: gblack@seattletimes.com
Copyright ¸ 1999 The Seattle Times Company |
