A day after Wintegra Inc. failed to become a public company on Nasdaq, its chairman, president and CEO Kobi Ben-Zvi told “Globes” why the company withdrew its offering and what it plans to do next. Ben-Zvi owns 11.5% of the company.
“It’s all a matter of timing,” Ben-Zvi said. “Besides the fact that we’re in a time of falling markets, on the day of the offering, stocks in our sector fell sharply. Marvell Technology Group (Nasdaq: MRVL) fell 15% for example. Marvell’s fall alone illustrates the conditions in which we were supposed to hold the offering.
“That aside, we’re strong enough, and we have enough cash to continue to exist, even without the planned capital raising.”
Wintegra has $12 million in cash. The company had hoped to raise $65 million at a company value of $290 million.
Early this month, Wintegra cut the target range for the offering from $14-16 per share to $12-14. Ben-Zvi reveals, however, that the price offered in yesterday’s flotation was even lower. “The big investment institutions told us that the offering could go forward at $10 per share, but that was very low for us. We’re sure that under normal conditions we can get a much better price for the company.”
Wintegra has developed the WinPath single-chip-solution for communications equipment vendors. The underwriters for the issue were Goldman Sachs & Co. (NYSE:GS), JPMorgan Chase Co. (NYSE:JPM), CIBC World Markets and Thomas Weisel Partners LLC.
“Globes”: Given the market conditions, and assuming that you didn’t need the money to make an acquisition or other immediate investment, why didn’t you cut the amount of the offering and the company value?
Ben-Zvi: “It was important to us to attract the large institutions to the offering. Such institutions won’t look at you if the amount of the offering is too low, less than $60 million. Under those circumstances, no one will look in your direction.”
Does this failure doom your chances of becoming a public company?
“Not at all. As I said, it’s a matter of timing, and we’re still determined to go ahead with the offering when the market makes it possible.”
Published by Globes [online], Israel business news - www.globes.co.il - on June 29, 2006
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