New York (NY) - The next stage of Infineon Technologies' spinoff of its memory division, Qimonda, got under way this morning on schedule, but not with all guns blazing, in analysts' view. As MarketWatch reported this morning, the general state of the memory market forced Qimonda to lower the number of depositary receipts it had planned to issue to 42 million from 63 million, in an attempt reportedly to boost demand.
Though the company had recently decided to cut its issue price as well, from a projected minimum of $16 per share down to $13, Reuters reported at early afternoon that the issue price was tweaked up a bit to $13.50. With share prices rising to $13.85 later in the morning, and 42 million shares issued, Reuters' math projected the sale would raise $628 million. We used a calculator and came up with a projection of $581.7 million, which is closer to the projection of MarketWatch where other similar electronic devices are used in calculation.
Analysts are worried that a cut in the number of shares sold indicates not only a slowdown in the technology economy, but also some reticence on the part of Infineon to exit the memory business as soon as it had originally planned. In a worst-case scenario, they noted, Infineon could still end up with a greater than 80% stake in Qimonda. But those prospects did not hinder Infineon's own stock value, which had risen 3.2% by early afternoon Wednesday to $10.87.