RealD Gets Serious with IPO - UPdate

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It happened; Oversold is a bad thing on airplanes, but a good thing for RealD; Reuters reports that RealD's IPO raised 33% more than expected - 12.5 million shares are sold vs 10.75 expected, at $16 per share vs $13-$15/share range expected. 

The total therefore is $200,000,000 in, minus costs and minus the amount that shareholders were selling (which is 52% of the sale, of which the late Roy Disney's Shamrock Capital Advisors sold 1.4 million shares, according to Businessweek.

As chronicled later in this running diary, the original expectation when filing the S1 was for "up to $200 million" in sales, for a valuation of 1 billion dollars. So, in the end, a nicely managed IPO. 


The NYTimes has a 13 July article titled Will RealD’s IPO Be a Blockbuster or a Flop? - According to MarketWatch, RealD is now expected to be listed on 15 July and is very oversubscribed. Another tech company (electronic white board manufacturer Smart Technologies opened their IPO exactly on the expected amount. [End update; 14 July]
RealD has formally launched their bid for an IPO, expecting to sell 10.75 million shares at $13 - $15 – obviously short of the $200 million sale/1 billion dollar valuation that had been floated earlier. The proposed trade date is 7/16.

Doubtless, they are getting lots of advice. The stocks are being flogged by: J.P. Morgan, Piper Jaffray, William Blair & Co., Thomas Weisel Partners, and BMO Capital Markets.

Renaissance Capital points out that at the mid-point of the proposed range, RealD will command a market value of $667 million - meaning that the 10.75 million shares roughly translates to 23% of the company. 

Charlotte Jones at Screen Digest lays it out pretty well at this article from 21 April (when the preliminary S1 form was released by RealD): Pure play 3D company launches IPO

RealD was an early player in the 3D game, with a love/hate relationship with the studios. They've invested a lot, and certainly 3D to the cinema wouldn't be where it is without them.

Recently they are getting pressure from their competitors, which is to be expected as the market matures. Dolby is no longer trailing by far, MasterImage is strengthening their base with a low-priced technology that piggy-backs on RealD's efforts, and the home 3D market is so far using infra-red style blanking, ala the XpanD system...which is also doing fairly well.

The important points remain; that the digital cinema revolution is less than 20% through its transition, which leaves a lot of conversions left in the world. 3D does not appear to be a fad, and is only getting stronger. The home 3D market is wide open, with several well funded companies putting money into their product lines...with many companies, such as RealD, capable of riding that set of coattails.