Netscape Ipo

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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…show more content…
The optimal capital structure minimizes the firm 's composite cost of capital and saves money for other opportunities. Therefore, the mandatory use of optimal capital structure and risk management is becoming increasingly important. Netscape 's operating result in 1995 had showed the Current ration (1.45) was low, the Debt to total capital ration (0.18) was high, which compared with its competitors: Microsoft (4.17, 0.00), AOL (1.00, 0.08), and Spyglass (13.75, 0.00). More long-term debt would decrease the Current ration, and increase the Debt ration. Additionally, of Netscape 's competitors were now operating as publicly held companies.

Netscape had been injected with various forms of investment capital, which included private equity investors. Continuing the same method to fund capital will further dilute Netscape 's ownership. Although, Netscape had a net loss of over $4 million on total assets over $42 million, and had never declared a profit in its short operating history, there must certainly be characterized as a risky IPO. However, based on the research of Wall Street and the positive results of Netscape 's road show, Netscape 's underwriters had the confidence that the market demands would be enormously high, and would continual to grow. According to all of the factors we have mentioned above, by balancing the intense competitions, the business risks, the high market demand, and the costs involved, we feel confident that Netscape would gain more
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