Lindows Cuts IPO Price Range

In a yet another sign of an ailing IPO market, Linux software company Lindows lowered the expected price range of its initial public offering Thursday for the second time.

San Diego-based Lindows reduced the price range of its IPO to $5 to $7 a share, from a previous range set Friday of $7 to $9. That already was reduced from the initial range of $9 to $11. The company still plans to sell 4.4 million shares, to raise between $22 million and $30.8 million.

Based on the midpoint of the proposed ranges, Lindows has slashed the amount it plans to raise by 40%. The company's CEO, Michael Robertson, whose previous venture MP3.com was embroiled in a major legal battle against record labels, has indicated an interest in buying up to $5 million worth of Lindows' stock. In addition, the underwriters -- Roth Capital Partners, JMP Securities, Merriman Curhan Ford & Co. and Kaufman Bros. -- have the right to purchase up to 660,000 additional shares.

The stock may start trading as soon as Friday on the Nasdaq under the ticker symbol LNE. The company abandoned earlier plans to go public via a Dutch auction, a controversial method being used by Google.

Lindows' price-range reduction comes amid a rash of discounting by companies planning to go public -- a symptom of the slackening IPO market. In addition, many companies are just bailing out altogether. Last week, seven companies withdrew or postponed their IPOs -- the highest weekly number since April 2001, according to Thomson Financial.

Lindows first filed to go public in April, perhaps hoping to capitalize on the buzz surrounding the Linux open-source software and fellow Linux vendor Red Hat(RHAT Quote). Red Hat, one of the few other publicly traded Linux vendors, has generated controversy because of its previously stratospheric valuation, but it's fallen amid the recent departure of the company's CFO and subsequent accounting disclosures.