Digital Domain Media Group measured Wall Street's enthusiasm for the VFX business with a $41.8 million IPO today on the New York Stock Exchange. With the company's future riding on planned expansions into production and marketing as well as education, DD will net about $38.5 million from the deal after commissions and other expenses.
DD sold about 4.9 million shares to investors at $8.50 per share today. By the closing bell, the share price had fallen to $7.15. Back in May, DD said it hoped to raise as much as $115 million, a tough order for a company that posted a net loss of $45.2 million last year. And it didn’t help when the company announced a net loss of $112 million for the first half of 2011, although DD blamed the losses on its investment in “growth initiatives.”

So any infusion of capital will give the struggling DD a little more room to bring those initiatives to fruition. It has already taken advantage of well over $100 million in tax benefits to build a base of operations in Florida, where it’s investing in a new animated feature studio and the Digital Domain Institute, an for-profit educational partnership with Florida State University that is slated to offer a four-year BFA starting next spring. DD is also a co-producer of the Gavin Hood-directed science fiction film Ender’s Game, based on the classic novel by Orson Scott Card.

Not everyone is impressed by what DD is up to in Florida. Local newspapers have covered the contentious story behind Digital Domain’s expansion into Florida under the guidance of owner John Textor, including local criticism of the state’s investment in a business model some see as risky. Industry blogger VFX Soldier has a good round-up of information about and reaction to DD’s new business model and IPO.

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