Inc Loudcloud - Loudcloud Goes Public

LOUDCLOUD GOES PUBLIC

When Loudcloud officially opened for business in February 2000, it had seven customers and $68 million in venture capital financing. By mid-2000 the company had raised another $120 million in capital. In September 2000 Loudcloud expanded into the European market by opening offices in London, Paris, and Munich.

On March 9, 2001, Loudcloud held its initial public offering (IPO). The investment climate for Internet-based companies was not favorable, however, and the company had to lower its initial offering price. Instead of selling 10 million shares at $10 to $12 a share, Loudcloud had to sell 25 million shares at an offering price of $6 in order to raise the necessary $150 million.

For the fiscal year ending January 31, 2001, Loudcloud reported revenue of $15.5 million. Its proforma net loss for the year was $94.7 million, excluding non-cash amortization associated with deferred employee stock compensation and a non-cash preferred stock dividend. The company's fourth quarter revenue increased 94 percent over third quarter revenue, from $4.6 million to $8.9 million.

At the end of the first quarter of fiscal 2002 Loudcloud announced initiatives to achieve a fully-funded business plan. Cost-cutting measures that were taken included a workforce reduction of 19 percent, representing 122 employees and resulting in a scaled back workforce of 507 employees. Following the cutbacks the company planned to continue to focus on customer sales, support, and satisfaction, as well as its core research and development efforts, while scaling back on other Internet support functions.