This week's announcement of Virgin Mobile's IPO has drawn comparisons to other IPO plans in the wireless space, but deeper analysis has been lacking. A BusinessWeek blog makes a few interesting points regarding the imminent Virgin Mobile USA IPO, teased out from the company's S-1 filing:
- Public investors will only be able to buy shares in a holding company--not the Virgin Mobile USA business itself.
- The risk section makes it clear that conflicts of interest could arise between public shareholders and holders of the actual operational assets, i.e. Sprint-Nextel and the Virgin Group.
- The company plans to amend and restate its agreement with current co-owner and network provider, Sprint Nextel, which runs through 2027. The prospectus doesn't say what exactly the amendment will entail, but as Sprint has struggled a bit recently, it could impact Virgin's bottom line.
- In July 2008, Sprint's affiliates have a right to stop offering Virgin's service in their regions if, for example, Sprint Nextel changes hands--see yesterday's rumor mill regarding just such a scenario.
For more on the IPO:
- see this post from BusinessWeek