iPod drives old-style IPO fervor

Rethink IT, Jan, 2005

Are we back to the golden era of IPOs suddenly? You well might be asking this after witnessing the takeoff of Portalplayer, a chip designer associated with the success of the iPod. PortalPlayer is the sole supplier of decoder chips to Apple's iPod.

Today it is valued at $623m after jumping by 65% in the last few days, after it raised $106m issuing 6,250,000 shares at $17 a share. Those shares are now at over $28 and stable.

All of the shares were sold by the company so none of the management got rich on this IPO. Portalplayer is a California-based fabless semiconductor company that designs system-on-chip, firmware and software for hard disk drive-based personal media players, or iPods.

In the year to date (nine months) Portalplayer did $47.8m in revenue, up 273% over the $12.8m it did in the first nine months of last year, and broke even (tiny loss) against a $7m plus loss this time last year.

The company had originally filed for an offering in a price range of $11 to $13 per share, but put the price up as it sensed the positiveness of the market.

With the vast majority of its revenue tied to the iPod, PortalPlayer warned that it "success depends on Apple's continued success". So perhaps it's only the golden era of IPOs if you happen to have something to do with Apple's iPod.