Riding the success of back-to-back animated hits, the entertainment company DreamWorks priced shares for its animation unit above the anticipated level, raising US$812 million in an initial public offering on Wednesday.
Heavy demand from investors pushed the sale of 29 million shares to US$28 a share, from an initial estimate of US$23 to US$25. The sale is the biggest initial public offering to emerge from Hollywood since MGM went public seven years ago and raised US$180 million.
Shares in DreamWorks Animation were scheduled to begin trading yesterday under the symbol DWA on the New York Stock Exchange.
DreamWorks was founded in 1994 by the Hollywood power brokers Steven Spielberg, Jeffrey Katzenberg and David Geffen, with the original idea of creating an entertainment powerhouse for the 21st century through movies, music, television and interactive media.
Animation unit
Over time, the movie studio has become the central focus of the company, as the other areas showed little promise. The animation division has been producing the most revenue within the movie studio.
DreamWorks has had huge hits this year in Shrek 2, which has taken in US$436.2 million at the box office, and the recently released Shark Tale, which has taken in US$138 million so far.
The public offering was a way to repay DreamWorks's original investors -- most significantly Microsoft co-founder Paul Allen, who sold 2.3 million shares in the offering. Allen and other investors put up US$1.1 billion to fund DreamWorks. He has an additional 34.5 million shares, which he has the option to liquidate in six months.
Katzenberg and Geffen will control the company through their Class B shares, and Katzenberg will be the chief executive.
Analysts and investors said that there was huge investor interest in the shares, not just because of Shrek 2 and Shark Tale but because of the huge success of competitor Pixar, the leading computer graphics animation company.
Another pixar?
"I think there's a lot of enthusiasm in the market for this particular company. They're in a very lucrative and sweet spot of the film production business," said Anthony DiClemente, an entertainment analyst with Lehman Brothers.
Brad Ruderman of Ruderman Capital in Beverly Hills, California, said: "One thing is certain: That Pixar has proven its doubters wrong." He added, "People said there was no consistency to their business, but those who bet against it have failed miserably. This is riding the coattails of that."
But Ruderman cautioned that DreamWorks did not have much of a track record to justify an elevated stock price.
"Just because Shrek and Shark Tale were huge hits, what does that mean two or three or five years out?" he asked. "I don't have the foggiest idea."
In a regulatory filing on Wednesday, the company said it planned to release an average of two animated films a year, and would focus on making computer graphic animated films.
Of the nine feature animated films DreamWorks has made since its founding, the four computer graphics films have been hits, and most of the hand-drawn animated films have been box office losers, with the costliest flops being Sinbad: Legend of the Seven Seas, and The Road to El Dorado.
Taiwan has experienced its most significant improvement in the QS World University Rankings by Subject, data provided on Sunday by international higher education analyst Quacquarelli Symonds (QS) showed. Compared with last year’s edition of the rankings, which measure academic excellence and influence, Taiwanese universities made great improvements in the H Index metric, which evaluates research productivity and its impact, with a notable 30 percent increase overall, QS said. Taiwanese universities also made notable progress in the Citations per Paper metric, which measures the impact of research, achieving a 13 percent increase. Taiwanese universities gained 10 percent in Academic Reputation, but declined 18 percent
RETHINK? The defense ministry and Navy Command Headquarters could take over the indigenous submarine project and change its production timeline, a source said Admiral Huang Shu-kuang’s (黃曙光) resignation as head of the Indigenous Submarine Program and as a member of the National Security Council could affect the production of submarines, a source said yesterday. Huang in a statement last night said he had decided to resign due to national security concerns while expressing the hope that it would put a stop to political wrangling that only undermines the advancement of the nation’s defense capabilities. Taiwan People’s Party Legislator Vivian Huang (黃珊珊) yesterday said that the admiral, her older brother, felt it was time for him to step down and that he had completed what he
BULLY TACTICS: Beijing has continued its incursions into Taiwan’s airspace even as Xi Jinping talked about Taiwan being part of the Chinese family and nation China should stop its coercion of Taiwan and respect mainstream public opinion in Taiwan about sovereignty if its expression of goodwill is genuine, the Ministry of Foreign Affairs (MOFA) said yesterday. Ministry spokesman Jeff Liu (劉永健) made the comment in response to media queries about a meeting between former president Ma Ying-jeou (馬英九) and Chinese President Xi Jinping (習近平) the previous day. Ma voiced support for the so-called “1992 consensus,” while Xi said that although the two sides of the Taiwan Strait have “different systems,” this does not change the fact that they are “part of the same country,” and that “external
UNDER DISCUSSION: The combatant command would integrate fast attack boat and anti-ship missile groups to defend waters closest to the coastline, a source said The military could establish a new combatant command as early as 2026, which would be tasked with defending Taiwan’s territorial waters 24 nautical miles (44.4km) from the nation’s coastline, a source familiar with the matter said yesterday. The new command, which would fall under the Naval Command Headquarters, would be led by a vice admiral and integrate existing fast attack boat and anti-ship missile groups, along with the Naval Maritime Surveillance and Reconnaissance Command, said the source, who asked to remain anonymous. It could be launched by 2026, but details are being discussed and no final timetable has been announced, the source