March 15, 2000 4:00 PM PST
Loudeye shares surge in first-day trading
Loudeye, which helps companies digitize and distribute video and audio media, closed at $40, a 150 percent gain from its initial public offering price of $16.
"Loudeye's performance was good, considering how everything else plummeted," said Randall Roth, senior analyst with The IPO Plus Aftermarket Fund. "It probably would have done even better if we didn't have people taking money out of the tech sector."
The company, which trades under the ticker "LOUD," raised $72 million in the offering, selling 4.5 million shares. Based on today's closing price, the company has a market capitalization of nearly $1.4 billion.
"We're happy to have an extra jingle in our pocket," said Martin Tobias, Loudeye's chief executive. Tobias, 35, a former Microsoft executive, holds about 31 percent of Loudeye's shares, now valued at more than $400 million.
The company states on its Web site that Tobias' "official title is the Minister of Order and Reason."
"We're counter-corporate and we like it that way," the site adds.
| Loudeye Technologies
at a glance
Chairman: Martin Tobias
President: David Bullis
Annual sales: $2.7 million
Annual income: ($11.9 million)
IPO: March 2000
Source: Bloomberg 3/15/00
Loudeye plans to use the IPO proceeds on expansion and for research and development. It operates a digital media lab in Seattle and plans to add labs in Los Angeles and New York by the end of the year. Tobias said the company is considering a European lab.
The company intends to increase its 25-member sales staff to market its digital media applications. The products allow people to publish, encode, host and manage content and applications on the Internet.
The potential market is large.
Although new content is being produced in digital formats, many companies are sitting on huge libraries of material that must be digitized before it can be sold over the Net. Few have the expertise or desire to do this in-house, providing a big opportunity for niche companies to step in and help with the process.
"We're like Balboa standing at the Isthmus of Panama and looking at the Pacific Ocean," Phil Leigh, an analyst at Raymond James Financial, told Bloomberg. "We know it's big, but just don't ask us to tell you how big."
Sonic Foundry, a strong competitor, "seems to have some integrated technical capabilities that Loudeye doesn't," Leigh said.
Bloomberg contributed to this report.