Orbitz Hopes To Raise $82 Million In IPO - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

IoT
IoT
Business & Finance

Orbitz Hopes To Raise $82 Million In IPO

The online travel company wants to bolster its finances to take on larger rivals such as Expedia and Travelocity.

WASHINGTON (AP) -- Orbitz Inc., the online travel company, intends to raise $82.2 million through an initial public offering of stock in an effort to beef up its finances and take on larger rivals such as Expedia and Travelocity.

The Chicago-based company, which has not yet set a date for the IPO, will offer 4 million shares priced in a range of $22 to $24 a share, according to a filing Wednesday with the Securities and Exchange Commission.

An additional 7 million shares will be sold in the same price range by a group of stockholders that includes American Airlines, United Airlines, Northwest Airlines, Continental Airlines, and Omicron Reservations Management, a unit of Delta Air Lines.

Orbitz, whose shares will trade under the symbol ORBZ on the Nasdaq Stock Market, was started in early 2000 with seed money from American, United, Northwest, Continental, and Delta. Since then, more than 22 million transactions have been completed at the site, which books airfares, hotels, and car rentals.

Despite backing from the nation's largest airlines, Orbitz warned potential investors that: "Many of our competitors have longer operating histories, larger customer bases, more established brands, and significantly greater financial, marketing, and other resources than we do.''

In the first nine months of 2003, Orbitz had a net loss of $1.4 million on revenue of $172.1 million, the filing said. At the end of September, Orbitz had $71.5 million in cash on hand.

Since its founding in February 2000 until the end of September, Orbitz said its losses, excluding one-time charges, have totaled $169.3 million.

Orbitz said other risks included potential conflicts of interest with its founders and a simmering contract dispute with Worldspan, a provider of airfare distribution technology.

Orbitz threatened to terminate its contract with Worldspan last month, saying the company had not lived up to specified levels of service--a claim refuted by Worldspan.

In its SEC filing on Wednesday, Orbitz said there is a risk that Worldspan might sue for damages resulting from bad publicity and that this could have a "material adverse effect" on Orbitz' finances.

A Worldspan spokeswoman reached Wednesday said the company did not immediately have any comment.

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
The State of IT & Cybersecurity Operations 2020
The State of IT & Cybersecurity Operations 2020
Download this report from InformationWeek, in partnership with Dark Reading, to learn more about how today's IT operations teams work with cybersecurity operations, what technologies they are using, and how they communicate and share responsibility--or create risk by failing to do so. Get it now!
Slideshows
10 Ways to Prepare Your IT Organization for the Next Crisis
Cynthia Harvey, Freelance Journalist, InformationWeek,  5/20/2020
News
IT Spending Forecast: Unfortunately, It's Going to Hurt
Jessica Davis, Senior Editor, Enterprise Apps,  5/15/2020
Commentary
Helping Developers and Enterprises Answer the Skills Dilemma
Joao-Pierre S. Ruth, Senior Writer,  5/19/2020
Register for InformationWeek Newsletters
Video
Current Issue
Key to Cloud Success: The Right Management
This IT Trend highlights some of the steps IT teams can take to keep their cloud environments running in a safe, efficient manner.
White Papers
Slideshows
Twitter Feed
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Sponsored Video
Flash Poll