Wired Magazine Pulls the Plug on Initial Offering

The publisher of Wired magazine has called off a scaled-back $66.5-million initial public offering amid concerns that the shares were still too expensive and that the company won’t make money until 1999.

In a filing Friday morning with the Securities and Exchange Commission, Wired Ventures Ltd. cited “adverse market conditions” for its decision to scrap its first-ever stock sale.

The offering would have valued the company at $293.4 million, but potential investors decided it wasn’t worth that much. Wired tried to value itself as an Internet company, complete with a Web site and a planned TV show, rather than the money-losing magazine publisher it is, analysts said.

The aborted deal also illustrates the growing wariness among investors about Internet stocks, which were the hottest play around earlier this year but have since cooled dramatically--even though the IPO market as a whole remains strong.

Although Wired may try to revive the sale yet again, it’s likely the company will turn to other financing sources, including selling a stake to private investors or signing a bank loan, said David Menlow, president of IPO Financial Network.

There was also speculation Friday that the deal had been hurt by questions over whether the company may have run afoul of U.S. rules barring stock issuers from touting the offering before its sale.

But a Wired spokesman said soft demand was the only reason the offering was canceled.

Wired has posted losses since it launched the magazine in 1993, largely because of the tens of millions it has spent on new ventures. Wired told investors as recently as Monday that it didn’t expect to turn a profit until 1999.