October 7, 1999 9:50 AM PDT

Webvan delays IPO after talks with SEC

Online grocer Webvan has unexpectedly delayed its initial public stock offering, one of the most widely anticipated Internet IPOs of the year.

Webvan, which began delivering groceries in June, was expected to price its shares today and begin trading publicly tomorrow. But the company and Goldman Sachs, the lead underwriter for the IPO, said its Wall Street debut was postponed after discussions with the Securities and Exchange Commission. The SEC declined to comment on the issue.

"The SEC and Webvan have agreed to a cooling-off period in view of the significant publicity surrounding the Webvan offering," a Goldman Sachs spokeswoman said, reading from a statement.

Neither Goldman Sachs nor Webvan would elaborate on the issue, citing the SEC-mandated "quiet period" for companies that have filed to go public. However, the Wall Street Journal reported today that the SEC is concerned that Webvan executives have made themselves available to the media despite that required silence.

The SEC is also concerned that Webvan has been sharing information in its road-show presentation that it did not provide in its prospectus, the Journal reported, citing unidentified sources.

As reported, Webvan's initial pricing range was $11 to $13 a share with plans to raise up to $325 million based on the high end of its pricing range and the 25 million shares it planned to float. It was to trade under the ticker symbol "WBVN."

The young company, which competes in a nascent market against NetGrocer and Peapod, posted revenues of $395,000 for the six months ended June 30, compared with zero a year ago. The company lost $35.1 million during that period, compared with a loss of $3.26 million a year ago.

Webvan gained attention last month when it lured George Shaheen as its new CEO from Andersen Consulting. Shaheen is set to be paid a base salary of $500,000 a year and stands to receive up to a 5 percent stake in Webvan.

 

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