Memory-chip maker Qimonda’s shares rise after offering cut by nearly half
NEW YORK – Shares of Qimonda AG, the chipmaker spun off by Infineon Technologies AG, rose in their trading debut Wednesday after the $546 million initial public offering’s size and share price came in below expectations.Qimonda traded at $13.52 a share Wednesday afternoon on the New York Stock Exchange, about 4 percent above the offering price of $13 per share. Infineon rose 37 cents, or 3.5 percent, to $10.90 on the NYSE.Infineon cut the initial public offering by nearly half early Wednesday, citing a weak demand for IPOs in the United States. The slashed offering followed rumors that the IPO would be postponed altogether.The reduced offering means that Germany’s biggest chipmaker ended up raising $546 million, down from the more than $1 billion it had initially sought.In a statement, Munich-based Infineon said it was offering 42 million American Depositary Shares, down from the 63 million shares it planned to offer at $16 to $18 apiece. The shares Infineon sold in the IPO equal a 12.3 percent stake in Qimonda. If Infineon exercises an option to sell an additional 6.3 million shares, the total stake of Qimonda to be sold will be about 13.2 percent.Thomas Weber, Infineon’s global head of communications, denied that Infineon decided against selling a larger interest in Qimonda because of the reduced pricing.”Our purpose was not to raise as much money as possible, but to execute on our strategy,” Weber said during a press briefing. “We have no need to raise money now, and since the market conditions are not favorable, we decided not to sell. It’s that simple.”The lower-than-expected pricing is the latest indication of trouble in the IPO market in general and the semiconductor industry in particular.”The semiconductor industry is down hard and people are reluctant to call the bottom because they’ve been wrong before,” said ThinkEquity analyst Eric Ross.Infineon, one of Europe’s largest chipmakers, said in November 2005 that it planned to carve-out its highly cyclical memory chip business to create two focused and independent companies that would ostensibly better cope with the different dynamics in each markets. Qimonda sells DRAM, or dynamic random access memory, chips to some of the world’s largest computer makers, including Dell Inc., Hewlett Packard Co. and International Business Machines Corp.Qimonda plans to use proceeds from the offering to expand its facilities in Richmond, Va., on research and development, and expand its manufacturing capacity.The company said last month that Qimonda made 100 million euros ($126 million) in the latest quarter, compared with a loss of 136 million euros a year ago.—On the Net:http://www.infineon.com
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