Skype Files to Raise $100 Million in U.S. Initial Offering

Skype SA, which provides software that lets more than a half billion users make telephone and video calls over the Internet, filed to sell $100 million of shares in a U.S. initial public offering.

The company, whose investors include EBay Inc. and private equity firm Silver Lake of Menlo Park, California, didn’t disclose the number of American depositary receipts it plans to sell or the price range of the offering, according to its filing with the Securities and Exchange Commission. Luxembourg-based Skype, which was founded in 2003 and has lost money in four of the past five years, will use the proceeds from the IPO for general corporate purposes, the filing showed.

Skype’s announcement came after the last six U.S. companies offered discounts to sell their IPOs and Eindhoven, Netherlands- based NXP Semiconductors NV raised 33 percent less than it originally sought. While filings for initial sales climbed to the highest since 2007 last quarter, half of the U.S. IPOs that have priced since then left buyers with losses, data compiled by Bloomberg show.

“It’s a good brand, a sexy brand of global reach in a growing market,” said Josef Schuster, the Chicago-based founder of IPOX Capital Management LLC and manager of the Direxion Long/Short Global IPO Fund. “That could be quite positive for the IPO market as a whole, which has truly suffered from a lot of underperformance lately.”

Underwriters

Goldman Sachs Group Inc., JPMorgan Chase & Co. and Morgan Stanley of New York were hired to lead the sale. Shares of Skype will trade on the Nasdaq Stock Market, its filing showed.

Skype, which had 560 million registered users as of June 30, was founded by Niklas Zennstrom and Janus Friis, who sold the company to San Jose, California-based EBay for $2.6 billion in 2005. Zennstrom resigned his role as head of Skype in 2007.

The pair regained a stake in their startup last November, when EBay sold the company to a group of investors led by Silver Lake for $2 billion. Zennstrom and Friis took a 14 percent stake in the company, while EBay retained 30 percent.

Skype, which started as a way for consumers to chat for free online, is developing premium services such as group video calling and pursuing corporate accounts.

Verizon, Panasonic

The company struck deals with Verizon Wireless -- co-owned by Verizon Communications Inc. in New York and Newbury, England- based Vodafone Group Plc -- and Panasonic Corp. of Osaka, Japan, to have its software pre-installed on phones and televisions.

Skype’s paying users at the end of June represented 1.4 percent of its registered users, its filing showed.

While sales increased 25 percent in the first half of 2010 from the previous year, profit fell 42 percent to $13.1 million, according to the filing. Interest payments at Skype accrued from the leveraged buyout in November also cut net income. The company had $690 million in long-term debt at the end of June.

Each ADR represents an ownership stake in an overseas company that is issued by U.S. banks and usually trades on American exchanges.

To contact the reporter on this story: Michael Tsang in New York at mtsang1@bloomberg.net; Lee Spears in New York at lspears3@bloomberg.net.

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