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.