Motricity’s equity activity

Contact: Brenon Daly

Although shares of Motricity have been trading on the Nasdaq since mid-June, it’s only been in the past few weeks that most of the action has taken place. We have already chronicled the difficult birth of the company, which had to trim both its offer size and price to go public. Debt-heavy Motricity ended up raising only half the amount that it expected in its June IPO.

Born under a bad moon, Motricity appeared destined to live out a life of quiet woe on the public market. And for the first three months, that’s exactly how it played out for the mobile data platform provider. Shares changed hands in the single digits. Then the stock took off, tripling from September to November. (That run was enough to tempt Carl Icahn, a significant shareholder in Motricity, to look to lighten his load in December. However, the activist investor pulled the planned secondary last week.)

For its part, the company has found its own use for equity: an acquisition. Earlier this week, Motricity picked up mobile advertising and analytics startup Adenyo for $100m upfront and (perhaps) another $50m in an earnout. Terms call for Motricity to use an unspecified mix of cash and stock to cover the bill. Adenyo, advised by Citadel Securities, did get a collar on shares as part of the final consideration. But for now, the once-volatile shares of Motricity have been holding steady at about $20 each, which is at the high end of the collar’s range.

The Motricity monstrosity

Contact: Brenon Daly

Pulled prospectuses, cut terms and broken issues – it’s a singularly poor time for any company to go public. We’ve already chronicled the dispiriting ‘new normal’ for IPOs, with smaller offerings and lower valuations. But just when it seemed that the IPO market couldn’t sink any further, along came Motricity’s offering.

The debut last Friday from the mobile data platform provider had to be trimmed, both in the number of shares and the price. Originally, Motricity planned to sell 6.75 million shares at $14-$16 each. At the midpoint of the range, that would have netted the unprofitable company, which has rung up a total deficit of some $313m, about $100m.

Instead, Motricity managed to raise just half that amount. It ended up selling just five million shares at $10 each, raising just $50m. Since then, the newly public shares been underwater, having only changed hands in the single digits. How bad is that? Consider this: Motricity’s valuation as a public company ($350m) is less than the amount of money that it raised as a private company.