Virgin Mobile USA IPO Disappoints

Shares trade just 5% above IPO price.
By Lucas Laursen,  Newser Staff
Posted Oct 12, 2007 11:15 AM CDT
Virgin Mobile USA CEO Dan Schulman, center, his daughter Molly, left, and Virgin Group Founder and Chairman Sir Richard Branson, right, are applauded as they ring the New York Stock Exchange opening bell...   (Associated Press)
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(Newser) – Virgin Mobile USA debuted on the stock market yesterday with disappointing results, according to the Wall Street Journal. Its closing price of $15.75, up 5% from the IPO, was at the low end of the $15-17 range predicted by deal manager Lehman Bros. Founding owners Virgin Group and Sprint Nextel retained 54% of their shares but may cut back to 47%.

The company avoids overhead costs by piggybacking on Sprint’s infrastructure with deals aimed at a youthful market.  But some of Virgin's subsidized phones have been reprogrammed for use on other networks, and the fickle teen-to-30-somethings market has proved elusive: about half its customers are 35 or older. The company has tried to fight back with lawsuits against reprogrammers.