WiMAX and LTE chipmaker Sequans Communications saw its shares fall 18 percent on its trading debut on Friday. The company's share priced closed on the New York Stock Exchange at $8.25 per share, down from its IPO price of $10. Sequans sold 7.7 million shares, which was 1.5 million less than planned and at a lower price than its expected $11 to $13 range.
The Paris-based company got its start in WiMAX chipsets but last year branched into LTE chips when that sector started gaining traction. The company's designs power the likes of the HTC EVO 4G, Sprint's WiMAX smartphone, and the HTC EVO Shift smartphone, also offered by Sprint. Sprint announced in March the HTC EVO View 4G tablet computer and the HTC EVO 3D smartphone, both of which incorporate Sequans' chips.
Sequans' chips are also used in products from firms such as Cisco Systems and Huawei. Sequans is backed by Alcatel-Lucent, Motorola and Swisscom AG and investment firms such as Add Partners, CapDecisif, I-Source Gestion, Kennet, Serena Capital and Vision Capital.
Some of the risks Sequans pointed out in its IPO filing include the fact that the company has a history of losses and indicates that it may never achieve or sustain profitability in the future on a quarterly or annual basis. In addition, the company said it depends on a small number of customers for a significant portion of its revenue. "If we fail to retain or expand customer relationships, our business could be harmed."
Underwriters have 30 days to purchase up to 1.1 million shares to cover overallotments. UBS Investment Bank and Jefferies & Co. are managing the offering.
For more:
- see this Wall Street Journal article
- read the company's IPO filing
- take a look at this RCR News article
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