| Loudcloud's Demise
Of course, one of the biggest duds for the quarter happened to be the Loudcloud (ticker: LDCL) IPO. Everyone kept hyping the deal up because of the fame for its CEO and co-founder Marc Andreessen. Andreessen became famous for his role in the development of Netscape Communications. However, that wasn't enough to win over investors in this market. Unfortunately, for Loudcloud they couldn't wait any longer to go public. The company was accumulating high losses and was in danger of running out of cash. This was another one of those offerings that saw reality sink in. After pricing 25 million shares at $6 (trust me there were plenty of revisions), Loudcloud's shares started to fall and even hit a low of 3 7/8 after many raised viable questions about the company's business model and what lies ahead for the Internet infrastructure play. The old theory that stated having a big name underwriter on the deal would all but insure a solid entrance should go right out the window. In this case, Goldman Sachs and Morgan Stanley Dean Witter served as joint lead managers on the transaction with help from Thomas Weisel Partners and Epoch Partners. At quarter's end, Loudcloud stood 4.7% off its $6 offering price and boasted a $385 million market valuation. To view the gory details, be sure to visit our best-and-worst table for the quarter.
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