IPO VIEW-Penthouse's planned IPO may be a damp squib

By Anupreeta Das and Robert MacMillan

SAN FRANCISCO, March 27 (Reuters) - A bearish market and investors looking for safe bets may dampen the planned public debut of Penthouse Media Group Inc, publisher of the racy men's magazine, as the company tries to win Wall Street's support of its switch of focus from print to online.

Penthouse said earlier this month it plans to raise $250 million in a public offering and expects to file a registration statement with the U.S. Securities and Exchange Commission in the second quarter.

The Boca Raton, Florida-based company, formerly known as General Media Inc and reorganized in 2004 under current Chief Executive Marc Bell, plans to use the IPO proceeds to pay down debt so it can focus on making money off the huge Internet audience for adult entertainment.

Bell earlier told Reuters the company has tamed down its flagship, once known for its hard-core brand of porn, to appeal to a wider audience, along the lines of popular "lad" magazines like Maxim.

Penthouse has also bought related Web businesses, including the adult social networking site Adultfriendfinder.com, as part of Bell's efforts to refocus the company's strategy.

"We're not a publishing company. We're an Internet company," Bell said in a later interview.

But investors currently have a poor appetite for new stocks of companies with unproven technologies or revenue streams, whether it's a biotechnology startup or a publisher of adult entertainment, IPO Boutique analyst Scott Sweet said.

"Regardless of (Penthouse's) new concept, it's likely to be a tough sell in this environment," Sweet said.