Etoys IPO Tops Upcoming List of Offerings
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There is only one marquee name among the handful of Internet companies expected to begin selling stock this week - eToys, the online etailer whose IPO was derailed for all of two days last month by its purchase of a Web company that sells items for babies.
eToys hopes to raise $90.2 million with an offering of 8.2 million shares in the $10-$12 range.
The Santa Monica, Calif.-based company is betting on the premise that parents would prefer the convenience of shopping online to the torture that is taking your children to a retail toy store, where whining and tantrums rule the day. And on top of that, the kids can misbehave too.
If you believe that successful businesses can be built around an innate understanding of human nature, then eToys, founded by a former Disney executive and Internet start-up incubator idealabs!, looks like a winner.
The company claims 365,000 customers, of which it says about 20%, or 75,000, were added in this year's first quarter. Etoys offers more than 9,500 different items under more than 750 brands, according to documents filed with the SEC.
Customers who visit www.etoys.com will find a well-organized site that allows them to search for products in several ways - by age range, by brand and by category (dolls, action figures, games, electronics, etc.). It is an experience that compares favorably to being dragged through a gauntlet of cluttered, chaotic store aisles by a tyrannical toddler.
This service and formula has allowed eToys to generate $30 million in revenue in the fiscal year ended March 31, a 419% jump over the previous fiscal year's sales of $687,000. That's slightly deceptive in that the company only sold products for 10 months in that first year; but even if you pro-rate the figures, revenue growth is impressive.
If you add in the revenue from BabyCenter, the company eToys bought in April (the deal is expected to close late next month), pro forma revenue for fiscal '99 was $34.7 million.
EToys' gross margin on '99 revenues was 19.1%, which is in the same ballpark as etailers such as Amazon.com (21.9%) and CDNow (19.8%).
But net losses also increased substantially, from $2.3 million in '98 to $28.6 in the recently ended fiscal year. Most of that can be attributed to $20.7 million in marketing and sales expenses last year.
If branding is the name of the game - and it is - then that money is justified, especially given plans by retail giant Toys R Us to spin off its Internet unit as an IPO. While toysrus.com so far has failed to challenge eToys as the leader in online toy sales, a large war chest provided by a public offering could change the chemistry of this competition.
Lead underwriter for the eToys IPO is Goldman Sachs. The company will trade on Nasdaq under the ticker symbol ETYS.
What's the Name Change All About.com?
We liked the name. We liked the ticker symbol. But now MiningCo.com and MINE are no more.
As of today the search engine company with the human touch has changed its name to About.com. In a statement, the company says the change was done "to reflect the breadth of our network and our continued commitment to being about everything that you're about."
Whatever that means.
The company will stick with the MINE symbol until Thursday, when its stock will be traded on Nasdaq under BOUT.
MiningCo.com went public on March 24, closing on its first day of trading at $47.50. Since then it has gone as high as $100 a share and as low as $46.43. It opened Monday at $58.75.