Special effect: Shares of 3-D firm RealD soar after IPO
Shares of 3-D systems developer RealD Inc. are rocketing Friday in their trading debut, after the Beverly Hills company’s initial public offering late Thursday.
The stock, trading under the symbol RLD, was up $3.69, or 23%, to $19.69 at about 10:20 a.m. PDT. The price spiked as high as $21 when trading began.
RealD and some of its pre-IPO investors sold a total of 12.5 million shares at $16 each. Robust investor demand allowed the firm's brokerage underwriters to boost the number of shares sold by 16% from what was originally planned, though all of the additional shares were offered by existing shareholders: They sold a total of 6.5 million, while the company sold 6 million.
At $16 a share, the IPO was priced above the range of $13 to $15 the company had expected.
RealD licenses its 3-D systems to theaters and develops the technology for use with consumer electronics. The company’s applications also have been used in the military, medicine and for piloting the Mars Rover.
With the 3-D business booming in Hollywood, investors obviously think they’ve got a winner in RealD.
But the seven-year-old firm has yet to turn a profit. It had an operating loss of $39.7 million on net revenue of $150 million in the year ended March 26.
The company warned in the prospectus for the stock sale that “almost all of our revenue is currently dependent upon both the number of 3-D motion pictures released and the commercial success of those 3-D motion pictures.”
In other words, RealD is a bet that the public’s infatuation with 3-D isn’t just a passing fad.
-- Tom Petruno