Synacor's IPO gets lukewarm reception as shares open at $5

Synacor (Nasdaq: SYNC), which had hoped to raise between $75 million and $94 million in its initial public offering, ended up cutting the price of its stock in half. On Friday it sold 6.82 million shares for $5 each, raising $34.1 million. Although shares touched $6.37 briefly on Friday, the stock closed at $5.25 and retreated an additional 2.1 percent on Monday to close at $5.10.

Synacor originally priced shares at $10-$12, but in an amended S1 filing last week dropped the price to $5-$6. According to reports, 1.4 million shares of the stock were sold by Synacor's existing shareholders. Company directors and top executives sold nearly 637,000 shares.

Synacor has made its mark providing Internet services, including TV Everywhere, to companies like CenturyLink and Charter Communications; the two companies made up 60 percent of the company's revenues in 2010, according to its SEC filing. It listed 49 ISPs as customers in the filing.

The company's customer-branded platform enables cable, satellite, telecom and consumer electronics companies to deliver TV Everywhere, digital entertainment, services and apps to 21 million end-consumers. Synacor has more than 45 customers--including Google (Nasdaq: GOOG) and Toshiba America--as well as more than 81 million average monthly search queries, 2.8 billion average monthly advertising impressions and more than 75 content partnerships.

Synacor posted a $3.6 million loss last year on revenue of $66.2 million. It had a net profit of $2.2 million on sales of $62.1 million through the first three quarters of 2011, up from revenues of $48 million during the first nine months of 2010. Much of the 29 percent in revenue growth is a result of an increase in the revenue it gets from Google search and display ads--a deal set to expire in February 2014.

This is the second go-round for Synacor in the IPO arena; the company previously filed to go public in 2007. It withdrew its plans in October 2008, due to an uncertain global economy.

For more:
- see this release
- see The Buffalo News article

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