Did you feel the earth tremble yesterday morning on your way to coffee? It was the underground vaults of Wall Street creaking open (maybe). At 07:34:18 yesterday, the SEC accepted filing number 333-161190 by Fortinet Inc. with respect to an initiially proposed public offering of up to $100 million of the company's common stock. The offering is being lead by Morgan Stanley with all the usual suspects ... Wilson Sonsini (company lawyers)and Davis Polk (underwriter's counsel).
Looks like the lawyers and bankers are back from the Hamptons, etc. (insert your favorite vacation site) and getting back to work. It will take a little while for the SEC to prepare comments and the lawyers to provide the filing amendments, but the August 10 filing date suggests a targeted offering for late Q4 or Q1 2010. The timing suggests Fortinet is counting on a strong 3rd and 4th quarter results for its UTM sales. You never spit into the wind - it gets ugly (ask the guys at SourceFire.
It is still early in the process but much can be gleaned from a review of the current filing and the amendments which should follow SEC review and comment. Check back for more details. It has been a few years since I dug into an S-1 so this should be fun.
A few areas worth investigating are (1) risk factors for references to open source technologies, virtualization and vulnerability management, (2) litigation, (3) preferred stock terms (and pricing), (4) issuance of equity in the last 3 years, (5) managment/founder's compensation and ownership and (6) related party transactions.
Maybe the value proposition of the UTM technology will resonate with Wall Street similar to what we are seeing on main street. There has never been a better time to sell more value for less and the UTM certainly does that.
Related articles Reuters, NY Times blog and SC Computing.
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