Loudcloud's IPO Smokescreen

from the smoke-and-mirrors dept

As Loudcloud is still working on getting their IPO out the door, they’re pulling a few tricks as well. The latest is that they did a reverse stock split so that while they’re offering more shares to the public, it’s at a much lower valuation than originally planned. In fact, the IPO is technically a “down round” since the valuation will be even lower than the last private round of investments. That is certainly not typical, and isn’t going to make the mezzanine round investors very happy at all (though, I guess the fact that they’re going public at all – giving them some chance at liquidity – might help).

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