Netscape Ipo

It all started with the development of a graphical software program that gave rise to the notion of "surfing" (Netscape 's). Netscape Communications can trace its roots to a group of science students working at the University of Illinois at Urbana-Champaign who turned a simply software program called 'Mosaic ', into a platform that enabled non-technical computer users to access and retrieve information that was becoming more and more available on the worldwide web. Founded in 1994, Netscape Communications Corporation provides a comprehensive line of client, server and integrated applications software for communications and commerce on the Internet and private Internet Protocol (IP) networks (Netscape 's). A key feature that the company incorporated into the design of its software products was the use of an enhanced security code. This code provided the confidentiality that clients demanded to sell advertisements and most importantly, execute financial transactions over the Internet.

Many young start-up companies eventually find themselves strapped for cash. Netscape would definitely fall into this category as it increasing felt the pressure and loss of market-share to a growing number of competitors. Many companies find it desirable to "go public" with an initial public offering (IPO) when their equity capital needs increase to the point where the opportunity cost of remaining private and compensating investors for the lack of liquidity becomes too great relative to the lower coat of capital derived from liquid public markets (Netscape 's). Netscape 's situation is somewhat unique in the fact that although its current book value was about $16 million dollars and it had yet to turn a profit, the groups lead underwriters put forth a proposal to the board of directors to double the original offering price of the stock from $14/share to $28/share 24 hours before the scheduled IPO (Netscape 's). Being part of an extremely unpredictable industry, the board of