FriendFinder IPO Delayed Indefinitely

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Bad news for FriendFinder Networks, they cancelled their IPO after delaying it earlier this week (see Story). They cited market conditions as the reason for not proceeding with the initial public offering. Once market conditions do approve though, FriendFinder Networks plans on reconsidering their position.

I am not surprised at the IPO being cancelled. The comments I read on multiple blogs about the IPO over the last couple of months have not been favorable. Some deal with the fact that most of FriendFinders income comes from adult sources while the rest point out, who wants to invest money in a company that will just use it to pay down their debt. The funny thing is most of FriendFinder's debt is due to the original purchase of the company from the founder Dr Conru, by Penthouse, and the resulting interest being charged. It is not due to the network of dating sites being profitable (which they are).

According to KESQ.com, of the 8 IPOs that have debuted this year, over half are trading below their offering price, with only 3 that are above. With this type of market investors are not willing to take any chances. Most are waiting for the global market to improve.

For more on this story, read the press release.