March 7, 2002 6:30 AM PST
Netflix sets plans for Wall St. premiere
The Los Gatos, Calif., company did not say how many shares would be offered or at what price they would be offered. The company hopes to trade under the ticker symbol "NFLX."
Netflix said it would use the money raised in the IPO to pay off $13.7 million in debt and for general purposes. The offering is being underwritten by Merrill Lynch, Thomas Weisel Partners and U.S. Bancorp Piper Jaffray.
Netflix charges a subscription fee of $19.95 per month. Customers go online to choose their movies, which are then shipped out via first-class mail. The company encloses mailers for customers to return the DVDs. There are no late fees, and customers can rent as many movies as they want during a month, but can only have three movies out at a given time.
Netflix says it has more than 500,000 customers, according to documents filed with the SEC. The company lost $38 million in 2001, on sales of $75.9 million. That was an improvement over the prior year, when it lost $57.3 million on sales of $35.9 million. Netflix had around $16 million in cash on hand as of the end of 2001.
In the aftermath of the dot-com demise, a few Internet companies are slowly testing the public offering waters. PayPal, an Internet-based payment service, had a splashy opening last month, but its stock has since settled down, and closed yesterday at $17.45, only slightly higher than its opening price of $15.41.
Online retailer Overstock.com registered for a $37 million offering earlier this month.