Transmeta targets modest IPO price

Transmeta's upcoming IPO will peg its stock at just $11-13 per share, according to the chip company's latest filing with the US Securities and Exchange Commission.

Even given investors' less-than-enthusiastic interest in technology stock, that does seem low, but should ensure that the company's share price rises during the first day of trading. As one analyst, David Menlow, president of IPOFinancial.com, told AP: "The interest in this company is off the scale, especially on the West Coast."

Some 13 million Transmeta shares will be offered for sale, just over ten per cent of the company's 126 million outstanding shares. At the mid-range price of $12, the IPO will net Transmeta $156 million, and leave it with a market capitalisation of between $1.39 billion and $1.64 billion.

Exactly when the IPO will take place isn't yet known. Sometime later this month appears to be the consensus among analysts.

During the first half of 2000, Transmeta lost $43 million on revenues of just $358,000. Between its inception and the end of June this year, it has lost a total of $119 million. However, now that volume shipments of its Crusoe x86-compatible CPU have begun in earnest, and with them major design wins with Sony, Fujitsu, Hitachi and IBM, Transmeta's finances should soon shift up a gear or two. ®

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