WideOpenWest (WOW) IPO Flops

Cable operator WideOpenWest’s (WOW) IPO got a thumbs down from institutional investors and the market Thursday.

The company priced 18.2 million shares at $17 per share. It had originally planned to sell 19.05 million shares between $20 and $22 per share.

WideOpenWest raised $309.4 million, well short of the $400.05 million anticipated.

And then shares opened at $16 before rallying above $17 for a short time and ending up at $16.50.

WideOpen West planned to use $364 million to pay off the principal of debt in 10.25% senior notes due 2019.

The lead underwriters of the deal are Credit Suisse, UBS, SunTrust, RBC Capital Markets, Evercore ISI and Macquarie. Raymond James is the co-manager of the deal.

WideOpenWest is the sixth-largest U.S. cable operator based on customers. It has 780,100 customers in Alabama, Florida, Georgia, Illinois, Indiana, Maryland, Michigan, Ohio, South Carolina and Tennessee.

But the company faces a tough climate due to people moving away from traditional cable services.

It’s a “cable company with declining subscriptions coming public when folks are cord-cutting and using mobile phones more than ever,” said Tim Collins, a money manager and stock strategist.

“That’s pretty much like trying on your new bathing suit after eating Thanksgiving dinner,” Collins said.

In its SEC filing, the company stressed it was focusing on high-speed data services for new clients, but the market clearly had trouble with the valuation.

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