Harsh Verdict on Motricity Quiet-Period Ending (MOTR)

Motricity Inc. (NASDAQ: MOTR) has not gone so well in the post-IPO market.  The price target came down to $10 to $11 per share from $14 to $16, while its size was cut to almost 5.9 million shares from 6.75 million shares.  The formal pricing went off on June 18 at $10.00 per share for 6 million shares.  That 6 million shares included 1 million purchased by entities affiliated with Carl Icahn.

The mobile data solutions provider is exclusively focused on the mobile Internet market.  It seems that growth for the big boys is not necessarily growth or huge reward for all.  The underwriters opened this one at $9.95 on June 18 and it traded a whole penny higher and has never seen the light of day since.  Shares even dipped under $7.00 before recovering recently ahead of the expiration of the quiet period.

Goldman Sachs was the negative or cautious initiation that started it with a Neutral, and it should be noted that Goldman was one of the joint book-runners in the deal.  JPMorgan was the other joint book-runner, and it initiated coverage with an Overweight rating.  Deutsche Bank and Needham started the firm with Buy ratings, and Pacific Crest assigned an Outperform rating.

The reaction to the quiet period also is focusing on the Goldman Sachs caution over the overall positive bias you might expect of this was weighed with each firm’s new rating having an equal impact.  Shares were down over 4% at $7.92 right ahead of the closing bell, but the stock closed down 2.2% at $8.08 on about 286,000 shares.

JON C. OGG