RealD IPO raises 33 percent more but Ed Butowsky, managing director at Chapwood Capital Investment Management questions the public offerings

http://www.today3d.com/2010/07/reald-ipo-raises-33-percent-more-but-ed.html

Ed Butowsky, managing director at Chapwood Capital Investment Management questions the public offerings for RealD. "I'm surprised that realD went public in the financial condition they are in. You have to look under the hood of an IPO and find out what the incentive is. Half of the stocks are sold by existing share holders - that bothers me. RealD have lost $60M in the first quarter. Would you pay $150M for a business that lost $60M in one quarter? I wont!

Prices at $16/share vs $13-$15/share range
Sells 12.5 mln shares vs 10.75 mln expected

IPO raises about $200 mln, 33 pct more than planned (Adds analyst comments, details on 3D movie industry)
With shares to begin trading on the New York Stock Exchange on Friday, the company is raising $200 million. It had originally planned to sell 10.75 million shares for $13 to $15 each, an underwriter said.
"It's pretty self-evident that there was tremendous demand," said BTIG analyst Richard Greenfield.

RealD said that underwriters will have a 30-day option to buy up to 1.88 million shares at the IPO price.

Globally, about 12,000 movie screens are 3D enabled and more than 5,000 of those carry RealD technology, 3000 are powered by XpanD 3D, and 1500 are powered by Dolby and others.
RealD generated $189 million in revenue in the 12 months ended March 26, 2010, the company said in a regulatory filing. The company collects a license fee from theater owners, and is dependent on Hollywood continuing to churn out 3D films.

"3D is one of the hottest topics in Hollywood right now," said Larry Gerbrandt, principal with Media Valuation Partners.

By the end of this year, 22 major films will have been released in 3D and in 2011 there will be at least 24, said tracking firm Hollywood.com Box Office.

James Cameron's 3D film "Avatar," which became the highest grossing film ever by making $2.7 billion at worldwide box offices after its December 2009 release, made a forceful case for audience's desire to see movies in the third dimension.

Of the $720 million that "Avatar" earned at U.S. and Canada box offices, 82 percent came from 3D screenings.

For the 14 movies released in 3D last year, 65 percent of their box office revenue came from 3D screenings, Hollywood.com Box Office said.

Hollywood studios are subsidizing the cost of RealD's glasses at theaters, but BTIG said it expects Hollywood to shift that burden to RealD and the theater owners.
Due in part to the glasses issue, BTIG has lowered its estimates for RealD earnings in fiscal years 2013 to 2015.

BTIG now expects RealD to generate $41.4 million in earnings before interest, taxes, depreciation and amortization in fiscal year 2011, and $143.4 million in fiscal 2015