initial public offerings (IPOs) trading on American exchanges

Wednesday, December 18, 2013

Gogo (GOGO) shares drop 15% as IPO lockup period ends

Gogo Inc. shares dropped sharply today as lockup restrictions on the stock expired and one of its largest investors, a private-equity fund, distributed shares to its limited partners.

Gogo's stock fell 13 percent to about $27 this morning. But the stock, which had a slow start after going public in June, was up 81 percent from its $17 IPO price before today, when Ripplewood Holdings announced the distribution of shares to its own stockholders.

New York-based Ripplewood, which invested in Gogo in 2006, owns 38 percent of the company's stock. Lockup restrictions, which prevent insiders from trading or distributing their shares for a predetermined period after an IPO, expired. But it will be up to Ripplewood shareholders to decide whether to sell their Gogo shares.

"This share distribution was made to provide our limited partners with greater flexibility to achieve liquidity," Ripplewood founder Timothy Collins said in a statement. "We continue to believe that Gogo has a very bright future as a leader and pioneer in the in-flight connectivity and digital entertainment solutions markets, and we have been extremely pleased by the performance of the company and the success of our investment in Gogo."

Gogo, based in Itasca, provides in-flight Wi-Fi and entertainment on commercial planes, including Delta and American Airlines. The company, formerly known as Aircell, was founded in 1991 and took a lot of time and money to get off the ground.

Gogo's second-largest shareholder, Oakleigh Thorne, holds about 29 percent of the company's stock.

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