Crown Media's initial public offering launched with a thud last Thursday. The parent company of cable's Odyssey network went public at 10:30 a.m. at $14, only momentarily reached $14.24. By 11:15 a.m., trades dropped below $14, and subsequent market activity indicated the company's underwriters, DLJ, Lehman Brothers and Salomon Smith Barney, were supporting the price at $14 for the rest of the day.
Crown, a subsidiary of Kansas City greeting card king Hallmark, entered the market one month after its originally planned IPO launch date, which coincided with the Microsoft market crash.
Thursday's restructured IPO was reduced by 2.5 million shares and priced $5 less than the first, effectively reducing the value of the offering from $250 million to $145 million and valuing the company at $870 million vs. $1.25 billion.
Crown president and CEO David Evans said the $145 million would still be sufficient to move the networks forward. Crown owns 53% of Odyssey and two international nets, but most of the money is intended to build programming and distribution for Odyssey, with particular emphasis on Hallmark content.
Evans said Crown made the move after being encouraged by an additional $5 million investment from Liberty Media on Wednesday and a 10% stake taken by a German firm the previous day.