Broadband-Over-Powerline IPO Intellon To Compete With Connexant, Maxim

Intellon Corp. has hellacious timing. The fabless chipmaker first tried to go public in 2000, which you might recall was an inauspicious time for technology companies. Now the company wants to give it another shot, registering in an amended filing Tuesday to sell 7.5 million shares at $9 to $11 each, despite the swooning stock market and rising fears of recession. I mean, if it's kicks they're after, why not just take the corporate yacht out to sea and start a bonfire?

OK, tech stocks have weathered the credit mess better than most sectors, and a few IPOs have done well (although the flurry of companies that have withdrawn offerings in recent weeks certainly gives pause). But on paper, Intellon doesn't look like a star: It's not Chinese, and it neither networks socially, sanitizes energy nor virtualizes operating systems. Its numbers also underwhelm: revenues of $36.6 million for the first three quarters of 2007, up from $24.8 million over the year-ago quarter, but only marginally better than the $33.7 million Intellon recorded in the period in 2006.

Intellon also remains some way from profitability, notching up a net loss of $4.4 million through the first nine months of the year. (Remember all the talk a few years ago about the new-and-improved financial thresholds for taking companies public?)

The company does offer some nice chips that, if broadband-over-powerline ever takes off, show promise. But selling integrated circuits in an emerging sector is a tough bet. Consider the fate of Intellon rivals such as sickly Conexant Systems Inc. (CNXT), another specialist chipmaker for home networking. Maxim Integrated Products Inc. (MXIM), whose $7.7 billion market capitalization would dwarf Intellon's public value, has fared better, but even its shares have struggled of late.

New rivals also are emerging, including serious players such as Gigle Semiconductor, which Tuesday announced a $20 million Series B round led by Scottish Equity Partners.

Meanwhile, Intellon's historical dependence on the capital markets suggests a company still trying to find its footing. It has undergone three recapitalizations since 2003, raising $66 million from more than a dozen investors during that time. That's a lot of dough for such meager sales.

Of course, appearing to steam ahead with an IPO might be Intellon's way of signaling its availability to potential buyers. If that's the plan, the timing might be just right.

See Nov. 27 story from Reuters
See amended S-1 filing from Intellon
See December 2006 story from TheDeal.com [$]