IPO floated for Lulu.com

Lulu.com could soon be awash in loonies.

The Raleigh book publisher is reportedly considering an initial public offering in Canada. Citing industry sources, Dow Jones Newswires reported that Lulu is aiming to raise as much as 50million Canadian dollars (about 48 million in nonloonie, U.S. dollars).

The company has hired Genuity Capital Markets and CIBC World Markets as the IPO's leading underwriters, Dow Jones reported.

By listing its stock in Canada, Lulu will likely pay less in costs associated with an IPO on a U.S. exchange, and Lulu won't have to submit to the same rigorous regulatory scrutiny, said John Fitzgibbon, publisher of IPOScoop.com in Edison, N.J.

U.S. investors could still buy shares. And once it's established as a publicly traded company in Canada, Lulu could generate investor interest and shift to a U.S. stock market.

Salix Pharmaceuticals of Morrisville first began trading in Canada in 1996 and later moved to the Nasdaq.

Lulu spokesman Jonathan Cox said it is company policy not to comment on rumors or speculation.

Lulu was founded in 2002 by CEO Bob Young and now helps authors self-publish about 15,000 new titles a month. The private company does not disclose financial results, but officials have said that Lulu is profitable and that revenue is increasing rapidly. Lulu collects fees for books it publishes, and sells services for authors.

Young has strong ties to Canada and to successfulIPOs.

Young grew up in Canada, graduated from the University of Toronto in 1976 and is the owner of the Hamilton Tiger-Cats of the Canadian Football League.

In 1993, he co-founded Red Hat and moved the software company to the Triangle.

During the dot-com boom, he helped orchestrate Red Hat's public stock offering that made him and other executives millionaires. That IPO's 272 percent first-day gain (or "pop") ranks among the best.

Taking Lulu public would prove that Red Hat's riches weren't a fluke.

Lulu is eyeing an IPO as stock markets are surging,fueling demand for riskier new stock sales. But any IPO plans have a long way to go. Lulu hasn't filed necessary documents with Canadian securities regulators.

An IPO will hinge on Lulu attracting enough interest among investors, and it could be delayed or scrapped if stock markets slump.

"This is like announcing a debutante ball for next fall," Fitzgibbon said. "The dance room's not even rented."

Lulu employs about 130people. Last year the company moved from Morrisville into a historic, renovated building near N.C. State in Raleigh. Lulu also has offices in Toronto, London and Bangalore, India.

Lulu recently began selling electronic books from traditional authors for the first time, giving it a new source of revenue and driving traffic to its self-published works. And its "weRead" application, which helps readers find new books and authors, gained more prominence through a deal with Yahoo.