Penthouse Magazine Publisher & Social Networking Company Had Sought to Raise $220 Million

February 5, 2010 – The Boca Raton based social networking company FriendFinder Networks has canceled plans for a $220 million initial public offering (IPO) citing market conditions.  The company had initially sought to raise $460million, with the objective of using the cash raised through the IPO to pay down debt. 

While as a social networking company, FriendFinder sponsors websites including the single Christian website BigChurch.com, it generates most of its revenues from adult websites.  These adult websites include Cams.com and AdultFriendFinder.com.  And, the company is the publisher of Penthouse magazine.

For the nine months ended September 30, 2009 the company reported net revenue of $244.4 million and a net loss of $27.4 million.  The company had been bought by the publisher of Penthouse magazine for $500 million in 2007.

With market conditions such as they are, many IPO buyers have questioned what the managers of the IPO,  RenCap and Ledgemont Capital Markets LLC could have been thinking in even trying to attempt an IPO for a company with such poor financial performance.  FriendFinder had intended to list its shares on the NYSE’s Amex.  And, without the IPO and its cash, many are questioning how long FriendFinder will be able to stay in business.