ENGLEWOOD, Colo. – Rhythms NetConnections Inc., a provider of Internet access services, went public April 6, offering 9.3 million shares at $21 apiece. The stock priced slightly above the company’s $18 to $20 dollar filing range.
Underwriters include Merrill Lynch & Co., Salomon Smith Barney, Hambrecht & Quist and Thomas Weisel Partners.
Brentwood Venture Capital, Enterprise Partners, Kleiner Perkins Caufield & Byers, MCI WorldCom Venture Fund Inc., Sprout Group, Enron Communications Group and Microsoft Corp. were venture backers. There were no selling shareholders.
Rhythms NetConnections designs and maintains digital subscriber lines (DSL), which are used during high-speed local Internet connections.
In March, MCI WorldCom and Microsoft each invested $30 million in Rhythms NetConnections, while a month later Qwest Communications Corp. invested $15 million. Rhythms NetConnections has incurred net losses since its inception in February 1997.
The initial public offering is estimated at $196 million, and proceeds will be used for development of network services and for general corporate purposes.
William Stensrud, general partner of Enterprise Partners, joined the board as a director in February 1997, followed in July 1997 by Kevin Compton, a general partner of Kleiner Perkins, Keith Geeslin, general partner of Sprout Group, and John Walecka, a general partner at Brentwood Venture Capital. Susan Mayer, president of the MCI WorldCom Venture Fund, joined the board in March 1999.
Rhythms NetConnections – Selected Financial
(in thousands, except per share data )
February 27, 1997 (inception)
to December 31, 1997 Year Ended December 31, 1998
Revenue -2,422 528
Net loss -1.12 -36,334
Net loss per share -12.18