Loudcloud, Andreessen Web Firm, Cuts Value Estimates as IPO Nears

Loudcloud Inc., an Internet consultant headed by Web pioneer Marc Andreessen, has halved the implied market value of the company as it plans its initial public stock sale.

Loudcloud would have an initial market value of as much as $674 million, according to amended plans filed last week with the Securities and Exchange Commission. The Sunnyvale, Calif., company in December had estimated its initial market capitalization would be as much as $1.3 billion.

Loudcloud, which has drawn attention because of its ties to Andreessen--who helped create Web browser technology and was a co-founder of Netscape Communications--reconfigured its offering as many Internet-related stocks have plunged.

While cutting its estimate of the company’s initial value by roughly half, Loudcloud now plans to give new investors a bigger piece of the company, offering about 30% of its common stock, versus 10% under its earlier plan, filings show.

Loudcloud’s filing says the company plans to sell 20 million shares at $8 to $10 each. Its previous filing said the company expected to sell 10 million shares at $10 to $12 apiece.

Those figures aren’t comparable, though, because the company carried out a one-for-two reverse stock split earlier this month, the SEC filing said. Adjusting for the effect of the reverse split, a share that Loudcloud expected to fetch as much as $12 in December would now be worth about $6.43.

Loudcloud’s offering is expected in the next few weeks.

The company, which says it expects significant operating losses for the foreseeable future, was founded by 29-year-old Andreessen in September 1999. The firm sells services to help clients build and maintain Internet operations.

Morgan Stanley Dean Witter, Goldman, Sachs & Co., Thomas Weisel Partners and Epoch Partners will underwrite the stock sale. The company has applied to trade on Nasdaq under the ticker symbol LDCL.