NEW YORK - FriendFinder Networks, which filed with the Securities and Exchange Commission (SEC) to go public with a stock offering, has opted for the New York Stock Exchange (NYSE) over NASDAQ, according to the S-1 documents.
The move has already created a stir in the industry as most technology/online businesses are listed on NASDAQ. However, Playboy, as well as some technology firms, is listed on the NYSE.
The investment bank for the stock offering is Renaissance Securities, part of Renaissance Group, a global firm with offices in Europe (Russia), Africa, the Middle East and the United States. One of its subsidiaries, Renaissance Capital, is the leading investment bank in Russia, Ukraine and the CIS.
AVN Online finance columnist Tom Johansmeyer offered his insight into the FriendFinder S-1 filing, noting that in the past year, its parent company PET had acquired Penthouse holdings prior to purchasing FriendFinder, though they are separate entities under the same umbrella. In the S-1, FriendFinder Networks Inc. is referred to as "formerly known as Penthouse Media Group." Additionally, the document refers to the AdultFriendFinder, FriendFinder and Penthouse brands.
"This looks like a strategy for exiting investors; they have a ton of debt that they want to get out of," Johansmeyer told AVN. "Basically, they're heavily leveraged. They're getting crushed by debt obligation.
"For example," he continued, "they've got a statement that they are at risk of not being able to meet their debt obligation, which is roughly equivalent to the amount of money they are trying to raise."
But the stock offering move could also turn things around, Johansmeyer said. "If they raised that amount of money, they can buy out of the debt and kind of start over," he said. "The only question is how much money they'll actually be able to raise."
The bold move could invigorate the industry as well, Johansmeyer suggested.
"Now if they do this, especially in this market, it's a huge step forward for the industry in terms of an initial public offering," he said. "I don't think there's been an IPO in 2008 and if there have been, there haven't been many. To go public in an unfavorable market wouldn't just take the industry forward in making a play in a capital market, it would also show the industry can do it regardless of market conditions. But it's a high-risk play right now."
Though unfamiliar with the bankers involved, Johansmeyer has high praise of the auditing company, Eisner, and commented, "I don't know the bankers involved, there are all kinds of boutique firms out there, but I do know their auditors, and they're a good firm."
Asked to comment on the deal, P. Holt Gardiner, a partner at Ackrell Capital, a leading investment bank focused on media and entertainment, said, "Although there are obviously significant challenges to completing the offering, including the unprecedented contraction and illiquidity of the capital markets, we believe that FriendFinder's filing will provide another indication of institutional investor interest in, and acceptability of, leading companies in this space."
