Value tell Fralli I said hi!
Stay out of trouble, and keep yourself out of the Business Week Mag's
Read the Stream Logic Thread I have posted some important info re:Diana there.
Inter@ctive WeekMay 16, 1997
Concentric Network Files For $33 Million IPO
By Randy Whitestone
5:00 PM EDT
Concentric Network Corp. has become the latest in a long line of Internet service providers
attempting to go public, filing for a $33 million offering today that would value the company
at $129 million. Concentric plans to offer 3 million shares with another 450,000
available for excess demand at $10 to $12 each, probably in late June.
In its filing, Concentric said it has lost $108.6 million since its May 1, 1991, formation on
sales of $27.8 million, including a loss of $66.4 million on sales of $15.6 million in 1996
alone.
Like many Internet service providers, or ISPs, Concentric has shown strong revenue growth
but a money-losing cost equation. Its 1996 revenue was six times its 1995 revenue, and its
first-quarter 1997 revenue was six times its first-quarter 1996 revenue. But every dollar of
revenue cost Concentric $6.51 in 1995, $3.06 in 1996 and $1.72 in 1997. The company also
wrote off $8.3 million worth of network equipment last year.
Beyond the basic cost of providing Internet service, the company's other operating costs also
have exceeded its revenue, until the latest quarter ended March 31. But even in that quarter,
the company's total costs exceeded revenue by a 2.5-to-1 ratio.
An offering at $11 a share would value the company at 3.5 times its current annual revenue
"run rate'' of $36.6 million.
Concentric said 54 percent of its revenue in the latest quarter came from business customers
such as Acer America Corp., Intuit Inc., Total Entertainment Network, WebTV Networks Inc.
and Ziff-Davis Inc., the joint venture partner of Inter@ctive Week.
Concentric Network can be reached at www.concentric.net |
