January 25, 2005 8:09 AM PST
Buy.com bounces back to IPO market
This IPO, if it pans out, will mark the second time that Buy.com has taken its shares public in less than five years.
The Aliso Viejo, Calif.-based company did not report in Tuesday's filing with the Securities and Exchange Commission how much money it hopes to raise via the IPO. Likewise, it did not detail how many shares it plans to offer or a price range for the shares. Buy.com said that RBC Capital Markets will act as the lead manager of the IPO and that Thomas Weisel Partners and Pacific Crest Securities will act as co-managers of the stock offering.
In February 2000--just as the dot-com bubble was starting to burst--the company raised $182 million through an IPO in which it sold 14 million shares at $13 per share. But after Buy.com failed to post a profitable quarter as a public enterprise, company founder Scott Blum bought back control of the firm for $23.6 million, or 17 cents per share, in November 2001.
Buy.com offers a range of consumer products, including books, toys and sporting goods, but it remains focused primarily on sales of computers and other electronics. The company said that it derived 88 percent of its sales from computers and electronics in 2004 and that it needs to continue to expand that portion of its business to get into the black.
In its SEC filing, Buy.com indicated that its profits and revenue have continued to falter since going private. The company recorded a net loss of $15.3 million on revenue of $290 million last year, but those results were an improvement over 2003 when it had a net loss of $25.6 million on revenue of $238 million.
The company, founded in 1997, said in the SEC documents that it believes it can tap into the projected growth in the online retail market to achieve profitability. It cited a Forrester Research report that predicted online spending in the United States will rise from $145 billion last year to $316 billion by 2010.
Buy.com could also be hoping to cash in on what has appeared to be a slight rebound for technology-related IPOs. After several years of sporadic activity, a collection of IT companies have posted favorable IPOs over the last 12 months. The number of venture-backed public offerings also picked up sharply in 2004, fueled by a rise in the number of technology and life sciences companies filing for IPOs.
Search giant Google delivered what may be the most high-profile IPO success story in the computing industry's recent history, when its value soared to $23 billion in an August 2004 public offering. Buy.com retail rival Shopping.com also scored a positive stock launch, when its shares increased by more than 50 percent from their opening price on the first day of its October 2004 IPO.