Virgin Mobile USA Announces $100 Million IPO

May 2, 2007 – 4:41 pm

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Virgin Mobile USA has been doing quite well with its’ marketing, which has been aimed at mobile youth. Not only have they shown strong sales growth, but now they’re ready for some public funding as they file for a $100 million IPO. They hope the funding can help them turn the corner on profitability.

The Warren, N.J.-based cell-phone company intends to use the proceeds to repay debt and pay an undisclosed amount to Sprint Nextel, according to the filing with the Securities and Exchange Commission.

Virgin Mobile said its Class A common stock will be listed on the New York Stock Exchange under the symbol “VM.” It didn’t disclose how many shares will be offered in the IPO, nor did it estimate a price range.

As of March 31, the company had 4.88 million customers, representing about a 15 percent share of the pay-as-you-go cellular market. Virgin Mobile launched its mobile service in July 2002.

In 2006, the company lost $36.7 million, narrowing from a loss of $102.9 million in the previous year.

This could be their chance to widen net margins and eek out a profit. Do you think the deal is a good one?

Resource: Business Week

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