October 8, 2002 1:15 PM PDT
TiVo sells stock to fill the till
The San Jose, Calif.-based company announced Monday that Crosslink Capital and New Enterprise Associates will buy $25 million worth of the company's stock.
TiVo, which offers digital video recording services to record and replay shows at will, plans to sell 6.96 million shares at $3.59 per share--a 3 percent premium over the stock's average closing price for the last 10 days. TiVo will also issue warrants for the purchase of 2.6 million shares of common stock at $5 per share.
Cash remains a key issue for the company, according to Matthew McCormack, a financial analyst with Freidman Billings Ramsey.
"Liquidity has remained a concern from the early days, when the company spent hundreds of millions of dollars on branding and subsidizing manufacturers' costs," McCormack wrote in a research note Tuesday. "We now expect TiVo to end the year (and reach profitability) with $40 million in cash."
Over the last few quarters, the company has been focusing on lowering operating expenses while expanding the number of technology and services licenses.
The company said in a release that it will use the sell-off proceeds for general corporate purposes and to supplement working capital.