Amid an uncertain stock market environment, advertising technology and media buying firm Mediaplex Inc. on Thursday postponed plans for a follow-on stock offering, citing market conditions.
“We do not feel that our current stock price properly reflects the market opportunity and future growth prospects for Mediaplex (MPLX) and, in conjunction with our board of directors, decided to withdraw the offering,” said Gregory Raifman, the company’s chairman and chief executive officer.
In a filing with the Securities and Exchange Commission, Mediaplex requested that its registration statement be withdrawn, because, “the Company and its underwriters have concluded that current market conditions will not permit the sale of the Company’s Common Stock at a price per share that would make the offering viable.”
The company’s decision may portend difficult times for the Internet advertising industry, as market conditions force ad companies to hoard money because they’re unable to return to the public markets for more dough.
Mediaplex’ stock closed at $39 on Wednesday, down from a 52-week-high of $104 1/8. When the company initially filed for the follow-on offering on March 17, its stock was trading at $60.125. At those prices, it would have raised $250 million to fund operations. Had the offering gone out at Wednesday’s prices, that number would have been $160.8 million — a theoretical loss of $89 million.
The possible tightening of the public markets to new offerings also means advertising companies will be forced to reduce spending, perhaps laying off staff. And an increase in the pace of mergers and acquisitions may be in store, as well.
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