Buy.com Founder Reprises Angel Role
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For the second time in two weeks, much troubled e-commerce company buy.com Inc. has been bailed out by its founder, this time as Scott Blum stepped up with financial support to maintain the operation's credit card agreements.
Blum said on Aug. 10 that the Aliso Viejo, Calif.-based company and self-proclaimed "Internet Superstore" agreed to be acquired by Blum and his company, SB Acquisition Inc., for 17 cents a share in cash.
The company had been delisted by NASDAQ after its stock price tumbled well below $1 a share.
And Buy.com, which closed at 10 cents a share on the OTC Bulletin Board on Thursday, said in a Securities and Exchange Commission filing earlier this week that it had received notices from credit card processors that they do not intend to renew agreements with the retailer, and that current relationships will end on Sept. 1.
"I am pleased to report that it's business as usual," said Robert Price, president of buy.com. "All of us at buy.com are pleased with the renewal of our credit card processor relationship."
As part of the merger agreement that Blum's wholly owned company, SB Acquisition, has with buy.com, Blum agreed to provide buy.com with interim financing of up to $9 million. The financial support provided today is in addition to this interim financing.
Buy.com, which ran head-on into the Internet crash and has never had a profitable quarter, had traded as high as $35 since going public in February of last year.
Buy.com says it offers nearly 1 million SKUs in a range of categories including computer hardware and software, electronics, wireless products and services, books, office supplies and more.