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Transmeta: IBM who?
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November 3, 2000: 1:06 p.m. ET
Company boosts its IPO price range despite Big Blue turnaround
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NEW YORK (CNNfn) - Mobile computer chip company Transmeta Corp. sent a big message to the initial public offering market Friday -- watch out for Transmeta next week.
Despite the black eye of IBM scrapping plans to use Transmeta's Crusoe microprocessor in an upcoming notebook, Transmeta boosted its expected IPO pricing range $5, nearly 50 percent, to between $16 and $18.
"This shows a tremendous amount of confidence," said Ben Holmes, president of IPOPros.com. "That's saying: 'We've got (share) orders, buddy.' I wouldn't be surprised if we saw an increase in shares."
The company now plans to raise about $221 million by selling 13 million shares, up from original expectations of $156 million. According to lead underwriter Morgan Stanley Dean Witter, the stock will price Monday, Nov. 6.
Get the details on Transmeta's IPO here
Transmeta suffered from adverse publicity when IBM announced it wasn't going with the company's Crusoe chip, designed to use less power so laptops can run longer, in its upcoming ThinkPad 240. But IPO analysts still backed the offering for strong first-day returns.
 Holmes said with the amount of research of its own IBM does, it is possible that IBM simply can come up with its own mobile chip. But, he added, Transmeta still has the advantage.
"There were a lot of people putting weight in the IBM decision," said Holmes. "But the first company to market with this wins."
The company still has a number of big-name customers. Sony Corp. (SNE: Research, Estimates), Hitachi Ltd. (HIT: Research, Estimates), and NEC already have laptops which use the Crusoe, Fujitsu Ltd. has committed to using it, and Toshiba Corp. is considering using it.
America Online (AOL: Research, Estimates) and Gateway Inc. (GTW: Research, Estimates) will use the Crusoe in Internet access devices.
According to a published report, Transmeta is working with Advanced Micro Devices on a chip. An AMD (AMD: Research, Estimates) spokesman denied the companies were working together but said there have been talks.
Transmeta will also get strong support from Linux operating system distributors since Linux inventor Linus Torvalds was on the software development team. Another big name, Microsoft (MSFT: Research, Estimates) co-founder Paul Allen, is an investor.
Santa Clara, Calif.-based Transmeta will trade on the Nasdaq as "TMTA." 
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Transmeta
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