THE WOODLANDS, Texas – Splitrock Services Inc., a facilities-based provider of advanced data communications services, went public August 2, offering 9 million shares at $10 apiece. The company’s stock priced at the low end of its $10 to $11 filing range.
Underwritten by Bear, Stearns & Co. Inc., Credit Suisse First Boston and Prudential Securities, the initial public offering left 55.7 million shares outstanding.
There were no selling shareholders. Venture backers included Linsang Partners and Carso Global Telecom.
Splitrock Services provides Internet service providers, telecom carriers and businesses with a broadband access network for Internet access, Web hosting and virtual private network services.
The company plans to use the expected $82.8 million in proceeds from the IPO to acquire rights to use dark fiber and related electronics equipment to complete broadband access network, enhance network to provide additional services and to improve network management, billing and other back office systems. The company will also use a portion of the proceeds to fund operating losses, working capital requirements and for general corporate purposes.
The company has never been profitable, losing $13.6 million in the six months ended June 30, 1998 and $51.4 million in the six months ended June 30 1999.
Kwok Li, chairman and managing member of Linsang, is a co-founder of Splitrock, serving as the company’s chairman of the board since July 1997 and as chief technical officer since April 1998. Marshall Turner, a director of Linsang, joined the company’s board of directors in April, along with James Nakfoor, vice president of Securities Trading for Inversora Bursatil, a unit of Grupo Financiero Inbursa, which is affiliated with Carso Global Telecom.
Splitrock Services – Selected Financial
(in thousands, except per share data)
Period from March 5, 1997 (inception) Year Ended December 31, Six Months Ended June 30
through December 31, 1997 1998 1998 1999
Total revenue 22,708 63,611 32,214 34,241
Net loss -10,121 -57,830 -13,628 -51,366
Net loss per share -0.42 -1.3 -0.31 -1.1