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Broadcom Co-Founders Rake in $59.4 Million

Technology: O.C. chip maker takes advantage of rich valuation in secondary offering.

October 22, 1998|P.J. HUFFSTUTTER | TIMES STAFF WRITER

The co-founders of Broadcom Corp., one of this year's hottest stock offerings, harvested an additional $29.7 million each Wednesday in a secondary offering by the Irvine-based chip maker.

Chief Executive Henry T. Nicholas III, 38, and Chief Technology Officer Henry Samueli, 43, each sold 430,000 shares at $69.

That follows the $6.5 million that each grossed in the company's spectacular initial offering in April, in which Broadcom's shares--priced at $24--zoomed to $53.63 in first-day trading.

Together, the pair still control 57.6% of the company, whose publicly traded shares are worth $545.8 million.

All told, Wednesday's offering raised $207 million, most of which went to the company's early investors. About 13% of the shares were sold by Broadcom, netting the company about $26 million, which it will use for general operating expenses.

The sale marks an unusually quick return to the stock market for Broadcom, a move that analysts said was prompted by a nearly 300% increase in the company's stock over the last five months.

Broadcom, which makes computer chips that speed up Internet transmissions over ordinary phone and cable-television lines, has traded as high as $90. Its shares fell 75 cents Wednesday, to close at $69.63, on Nasdaq.

Internet-related offerings such as Broadcom and EBay Inc. have been wildly popular with investors this year.

Broadcom also is benefiting from investors' eagerness to take advantage of companies that are on hot streaks.

Analysts expect secondary offerings from Standard Pacific Corp., a Costa Mesa home builder, and Intuit Inc., the Mountain View-based maker of personal-finance software, to be warmly received in the coming weeks.

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