MaxLinear IPO Prices Stock Above Range at $14 a Share

3/23/10Follow @bvbigelow

What began as a modest IPO for Carlsbad, CA-based chipmaker MaxLinear appears to be heating up. In a statement released tonight that MaxLinear increased its initial offering to 6.4 million shares at $14 a share—from 5.4 million shares at a range of $11 to $13 a share. The new stock offering is one of six IPOs expected this week, which has market watchers buzzing about the busiest week for IPOs in a couple of years. The company’s shares will trade on the New York Stock Exchange under the ticker symbol MXL (NYSE: MXL).

A number of forces have converged to make the MaxLinear IPO hotter than most. MaxLinear focuses on designing semiconductor chips that enable people to watch TV on devices with a wireless broadband connection. The company’s offering also comes during an auspicious week in the markets. Financial Engines, an investment adviser based in Palo Alto, CA pulled off the biggest IPO since the fall of 2009 when it went public last week.The S&P 500 Index has also reached its highest trading level since September. Market analysts have been saying that MaxLinear’s IPO, like the Financial Engines IPO last week, is over-subscribed.

As I mentioned in a preview of MaxLinear’s IPO, the company initially expected to raise $42.7 million, or nearly $50 million, if the underwriters exercise over-allotments that could bring the total offering to 6.25 million shares. With the last-minute increase to 6.4 million shares, MaxLinear’s offering is expected to raise close to $90 million.

The company’s filing showed that about 1.27 million shares, or 27 percent of the initial offering, are being sold by MaxLinear’s venture investors, which include San Diego’s Mission Ventures, (which owns a 13 percent pre-IPO stake); U.S. Venture Partners, (21.6 percent); Battery Ventures, (13.8 percent); and UMC Capital, (7.1 percent). The company plans to use the capital for general corporate purposes and acquisitions.

The Carlsbad chipmaker’s IPO also was stoked Monday evening by “Mad Money” pitchman Jim Cramer on CNBC. In his inimitable way, Cramer said, “MaxLinear is a play on many of the big themes that we’ve been hitting on all the time. The company designs high-performance, low-cost radio frequency receiver chips that capture and process broadband signals—which allows us to watch broadband video on cable boxes, digital TVs, mobile phones, computers, vehicle displays, and other networks. This is at the heart of the tsunami. Broadband video on your phone?! Oh man! That defines the tsunami!”

Bruce V. Bigelow is the editor of Xconomy San Diego. You can e-mail him at bbigelow@xconomy.com or call (619) 669-8788 Follow @bvbigelow

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