Casa Systems, a provider of fixed, mobile, optical and Wi-Fi network solutions for ultra-broadband services is prepared to test the markets this Thursday with an intent to sell 8.4 million shares of common stock at a midpoint price of $16.00 per share. Barclays Capital and Morgan Stanley are the lead underwriters of this offering which expects to net proceeds of $134.4 million before fees. The company will be traded on the Nasdaq Global Select Market under the symbol “CASA.”
Some of Casa Systems clients include Charter/Time Warner Cable, Rogers and Mediacom in North America; Televisa/IZZI Mexico, Megacable Mexico and Claro Telmex Colombia in Latin America; Liberty Global, Vodafone and DNA Oyj in Europe; and Jupiter Communications and Beijing Gehua CATV Networks in Asia-Pacific. According to the company prospectus, their solutions are commercially deployed in over 70 countries by more than 400 customers.
Major Architectural Shift
According to page fourteen of the company’s Form S-1/A under the section titled “Risk Factors” the company believes that the broadband service provider industry is in the ‘early stages of a major architectural shift.’ The company goes on to state that they are ‘developing products and services that we believe will be attractive to our customers and potential customers who make that shift.’ Time Warner Cable, one of Casa Systems’ largest clients accounting for 36% of their revenue for this year (for the nine months ended September 30, 2017) is one of the major ISPs that stands to profit the most if the historic 2015 ruling on net neutrality is overturned.
Net neutrality is the basic principle that prohibits internet service providers like Time Warner Cable, AT&T, Comcast and Verizon from speeding up, slowing down or blocking any content, applications or websites you want to use. It also prevents internet service providers from charging you extra to access the competitors’ content. Say you want to use Google to do a quick search. Well, since Verizon owns Yahoo, it’s now going to cost you a little extra to use the competitor’s service. The big internet service providers will continue to laugh all the way to Wall Street while small businesses suffer.
The vote on net neutrality will take place this Thursday, December 14, the same day Casa Systems goes public.