PW: Buy.com IPO a Hit

Buy.com's initial public offering generated gross receipts of approximately $182 million last week when the e-retailer sold 14 million shares at $13 per share; the company had expected to price the shares at between $10 and $12. The offering was quickly snatched up by investors who bid Buy.com's shares up to a high of $35 per share before falling back to finish the first day of trading at $25.12.

The strong reception to the IPO occurred despite mounting losses for the company. While revenues at Buy.com jumped 376% to $596.8 million in 1999, its net loss increased to $130.2 million from $17.8 million in 1998. The company attributed the sales gain to significant growth in its customer base, repeat business from existing companies and the launch of new online stores. The majority of its revenues came from sales of hardware and software, with BuyBooks.com making a minor contribution. The company stocks about 450,000 titles, which are fulfilled through Ingram. As part of its agreement with Ingram, Buy.com has issued warrants to Harpeth Holdings, an Ingram affiliate, to purchase 625,000 Buy.com shares at $9.07 per share.