Buy.Com inc - Ipo Raised $182 Million In 2000

Buy.com 's initial public offering (IPO) took place in February 2000. The company sold 14 million shares at $13 each, raising approximately $182 million. Investors quickly bid the price up to $35 on the first day of trading before closing at $25.12 a share. Investor interest appeared to be unaffected by Buy.com 's failure to turn a profit. Although revenue for 1999 increased nearly fourfold to $296.8 million, the company's loss for the year was $130.2 million, compared to a loss of $17.8 million in 1998.

As part of its sponsorship agreement with the PGA Tour, Buy.com made a heavy investment. It issued 1,125,000 shares to the tour, and made a cash payment of $8.5 million from the IPO. This was in addition to $6.4 million paid to the PGA Tour in 1999 and a $17 million letter of credit issued as security for payment of the sponsorship fee.

Buy.com expanded in several ways in 2000 with varying degrees of success. Through an alliance with United Airlines it opened a full service airline ticket booking service called buytravel.com. The site offered discounted fares and rates from United, fares from about 500 other airlines, and other travel-related services including hotels and car rentals. Buytravel.com operated from February to November 2000 before it was shut down. Other specialty stores that opened during 2000 included a new business super-store offering more than 55,000 office products, and a new sports store powered by Global Sports that offered activewear and sporting goods. In April 2000 Buy.com launched its License Online Program, which offered software licenses on the entire line of Microsoft licensing products. The program was later expanded to include software from Symantec, Computer Associates, Executive Software, and Trend Micro.

The company expanded internationally by opening Web sites in the United Kingdom and Australia. Both sites were accessible from Buy.com's home page. However, Australian operations were discontinued in November 2000, and the company's operations in the United Kingdom were sold to Britain's department store group, John Lewis Partnership, in March 2001.

Buy.com added wireless phones, service, and accessories to its product mix with the mid-2000 acquisition of online retailer Telstreet.com for about $8 million in stock. In October 2000 Buy.com opened its Wireless Store, which enabled customers to compare mobile phones and plans. The site also offered cellular phones and accessories, cellular plans, Web-enabled phones, and FRS radios. Among the wireless companies represented at the store were Ericsson, Nokia, Motorola, Mitsubishi, AT&T, Nextel, and Verizon. In the second half of 2000 Buy.com began offering wireless access to its Web site through agreements with Sprint PCS and AT&T Wireless, and Web-enabled mobile phone users could access and shop the Buy.com Web site.