Seven months after registering to go public, ReplayTV withdrew its initial public offering on Monday, amid slowed enthusiasm for tech IPOs in general and digital video recorders in particular.
ReplayTV’s primary competitor, TiVo, went public during a tech-sector boom last October at a share price of $16 that soon soared as high as $78.75. By Jan. 26, when Mountain View, Calif.-based ReplayTV first filed for its IPO, tech stocks still were booming.
But a lot has changed since then.
Tech stocks have tumbled, and TiVo has nose-dived. In recent weeks, TiVo stock has fallen below even its launch price, though Monday’s close was $18.69.
Lee Isgur, a tech-sector analyst and chairman of the Corporate Counselors venture firm in Woodside, Calif., said simple reality has set in.
“There’s now a tremendous awareness that a lot of IPOs won’t work,” Isgur said. “There is a more realistic perspective that once again is being applied to all stocks. For instance, TiVo is interesting and a lot of people like it. (But) in the end — what are its earning prospects? Those remain to be seen.”
ReplayTV had projected about $150 million in net proceeds from its IPO. In a new regulatory filing, the company cited stock market conditions for pulling the IPO, which was being managed by Morgan Stanley Dean Witter.
“The marketplace is looking at stocks of this ilk and yawning,” said David Menlow, president of investors service IPOfinancial.com. “The IPO market is very treacherous right now because we are clearly in a buyers’ market, and deals that come in have to really knock investors out of their chairs.”
Replay and TiVo sell high-tech recorders tied to subscriber services that allow TV viewers to record large blocks of programming and customize the lineup of shows. To date, Replay has only several thousand subscribers and TiVo tens of thousands.
Both companies have continued to announce new investors and strategic alliances. Replay recently announced that Time Warner Cable will conduct market trials of its systems and unveiled a partnership with Nielsen Media to measure changes in TV usage in homes using its devices.