Paul Allen Raises His Stake In Metricom Inc. Company Working To Develop Wireless Internet Technology Gets Financial Boost From Billionaire
Metricom Inc. said billionaire Paul Allen raised his stake in the company to 32.9 percent, securing additional backing for its innovative wireless Internet technology from a leading U.S. technology investor.
Metricom also said it’s in discussions with Allen and others about bringing in additional management to strengthen the company as it builds a national wireless Internet communications network.
Allen’s Vulcan Ventures Inc. bought 2.58 million Metricom shares for $15.5 million on Sept. 25 through an agreement with Lindner Investments, according to a filing today with the Securities and Exchange Commission. Allen, listed as one of the technology industry’s richest men by Forbes magazine and a co-founder of Microsoft Corp., now holds 4.50 million shares of the Los Gatos, California-based Metricom.
“Paul is acutely interested in our new 128-kilobit-per-second technology,” said Metricom Chairman Robert Dilworth.
That technology will allow Metricom to deliver Internet information to subscribers about five times as fast as its current wireless network allows.
Metricom shares rose 3-5/8 to 10-3/4, their highest level since March.
Metricom is also seeking to broaden its management base with people who have experience in telecommunications companies, Dilworth said.
“That will be increasingly important to us as we build a national network,” Dilworth said. Metricom currently offers wireless Internet service in the San Francisco area, Seattle and Washington, D.C.
Two weeks ago, Furman Selz Inc. said it’s preparing to sell $100 million worth of Metricom notes.
Metricom is discussing a bond issue with investment banks, he added. Metricom is not yet ready to reveal any details of a bond sale, Dilworth said.
Metricom’s shares reached a 52-week low of 4-33/64 on Aug. 11, a 75 percent decrease from a high of 18-3/8 last October. The company’s stock has risen 58 percent since Aug. 11, and rose 3/8 in trading Friday to close at 7-1/8.
Allen, who co-founded Microsoft with Chairman Bill Gates in 1975, runs the Bellevue, Washington-based Vulcan to invest in other companies. These investments include the Portland Trail Blazers basketball team and the DreamWorks SKG film studio. Allen still sits on Microsoft’s board and holds investments in other technology companies.
Lindner Investments withdrew its proposal for the sale or merger of Metricom in February. Lindner contended that Metricom’s share price didn’t reflect the company’s competitive edge with one of the cheapest and fastest wireless solutions for linking computers.
Lindner held a stake equivalent of 4.1 million common shares at the time.