12/3/00 Gemplus Revises IPO terms, Citing Poor Markets
[note that this 5 days old]
December 3, 2000
Noah Barkin
PARIS (Reuters)
Gemplus, the world's leading provider of smart card technology, said Sunday it was revising the terms of its initial public share offering due to unfavorable market conditions.
Gemplus shares, which was to start trading on Dec. 6, will not be introduced on the Paris and Nasdaq markets until Dec. 8.
In a statement, the company said it would propose to market authorities that the indicative price range of its share offering be revised down to 5.75 to 6.25 euros from 7.25 to 8.25 euros.
($1-0.8793 euros)
"The revision of the price range is directly linked to the unfavorable market conditions since the start of the operation, in particular the recent drop in the Nasdaq," the company said.
Gemplus said the deadline for the global placement and retail offer of shares would be pushed back to Wednesday, Dec. 6 from Monday, Dec. 4.
It said orders placed since Nov. 29, the starting date of the previous period, were no longer valid, and that new orders would have to be placed up until Wednesday.
That would mean the definitive price for the shares would be known on Dec. 7 and the first day of trading on Euronext Paris and the U.S. Nasdaq would be Dec. 8.
INVESTORS TURN AWAY FROM TECH SHRS
A year ago, when the markets could not get enough technology and telecommunications shares, an IPO like Gemplus would have been a smash hit.
With a 31 percent share in the global smart card market and 41 percent share in the mobile telephone SIM card market, Gemplus has seen average annual sales growth of 36 percent since 1995, above market growth of around 30 percent.
Developing smarter SIM cards for third-generation mobile handsets and multi-application chip cards that will serve as electronic purses, secure ID cards and phone cards rolled into one, will assure Gemplus a rosy future, analysts said.
But investors have soured on so-called "TMT" shares of late resulting in a series of botched or delayed flotations.
The Nasdaq composite index, which acts as a benchmark for tech sentiment around the world, ended November with its worst monthly performance in 13 years.
That backdrop spoiled the bourse debut of Telefonica Moviles two weeks ago and resulted in the postponement of smart card firm Xiring's own IPO last week.
Gemplus, which garners half of its sales in the fast-growing mobile phone market, is floating up to 15 percent of its capital on the Paris bourse and Nasdaq in a sale of new and existing stock.
Last week, analysts called the price of the offering expensive and questioning how successful the IPO would be.
"The market is not ready to pay exorbitant prices right now," IFF analyst Stephane Dubail said Friday. "I can't say I'm negative on the stock, but with the market like this, I can't say I'm positive about the IPO."
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