Netscape Initial Public Offering Case

Netscape was founded in April 1994 . It aimed at providing a comprehensive line of client , server and integrated applications software for communication and commerce on the internet and also on private internet protocol networks . In August 1995 , Netscape was confronted with a decision about what price to charge for its shares in the initial public offering (IPO . Since the demand for its share was high and the company had not generated any positive earnings at the time of IPO , the Directors were in a dilemma of pricing the shares . Netscape had made

a loss of 4 .3m and operating quarters ending 30th June 1995 and the company expected to operate at a loss for the next unforeseeable future

In August 1995 , Microsoft was only weeks away from releasing its long awaited Windows 95 operating system . Microsoft had also made strides to move into Netscape 's market hence threatening by the increasing popularity of Netscape 's web browser and its access providers

Netscape 's IPO generated proceeds resulted to increase on the other stocks on the first day of trading This was attributed to ventures backed by high technology stock offering especially for those related to internet

The parties involved in the IPO included Netscape 's founders and the senior management team . The underengaged in the IPO process were investment bankers who were responsible for everything from doing initial due diligence to issuing the final prospectus which...