Low Skies Over the Loudcloud Offering

Updated from 1:40 p.m. ET

A year ago, the initial public offering of Loudcloud, the Web site builder started by Netscape co-founder Marc Andreessen, would likely have been met with unbridled glee. Today, its underwriters are having a hard time getting it out the door.

Late Wednesday, the company delayed the pricing of the deal by a day, saying that bad weather delayed meetings with potential investors. In fact, it appears the real reason for the delay is that potential investors considered the deal too pricey.

With the deal, according to market sources, still undersubscribed this morning, Loudcloud cut the expected price of its IPO to $6 a share from $8 to $10 a share, according to a filing with the Securities and Exchange Commission, while boosting the number of shares it expects to offer to 25 million from 20 million. That means that it will raise $150 million, whereas previously it hoped to raise $160 million to $200 million. ...