Digital Island
plans public
offering
The former isle-based company,
By Russ Lynch
which still has a data center in
Hawaii, seeks to raise $75 million
Star-Bulletin
Digital Island Inc., which developed an Internet business in Honolulu and is now based in San Francisco, plans to raise $75 million through an initial public offering.
The timing of the issue and the price of the shares have yet to be decided, according to a preliminary statement filed with the Securities & Exchange Commission.
Digital Island provides businesses that operate on the Internet with a separate private global network so they can avoid the congestion that occurs when huge masses of data are moved on the public system.
The company was founded in California in 1995, but moved to Honolulu in 1996 before its business really got started. It went online with its system in 1997.
Since most of its business now is on the mainland, the company moved its headquarters to San Francisco a month ago. Its executives were already there and no Hawaii employees were moved, a spokesman said today. However, it still has a data center in Honolulu with 28 employees.
The company's preliminary prospectus stresses that it is a start-up company that has lost money since its inception and expects to continue to experience losses as it spends money to expand. In late March, Digital Island announced it had raised $50 million in new capital from private investors.
In the six months through March 31 Digital Island had sales of $3.8 million and a net loss of $14.4 million, the statement said. In the year-earlier six months it had sales of $691,000 and a loss of $6.8 million.
For the 12 months through Sept. 30, the company had sales of $2.3 million and a loss of $16.6 million. In the previous year, sales totaled $218,000 and the company had a loss of $5.4 million.
The company said it expects its stock issue to be underwritten by Bear, Stearns & Co., Lehman Brothers and Thomas Weisel Partners.
Digital Island said its shares will be sold under the ticker symbol ISLD on the Nasdaq stock market.
