Tech retailer Newegg files for public offering
With the market for initial public offerings heating up, online tech retailer Newegg.com is looking to cash in.
The fast-growing City of Industry company, which sells computers, software and consumer electronics, filed Monday to sell as much as $175 million in stock to the public.
The company was founded in 2001 by Fred Chang, a Taiwanese immigrant.
Despite intense competition, Newegg’s sales have more than doubled since 2004, to $2.1 billion in 2008. The firm earned $28.8 million last year.
Net income was $16.1 million in the first half of this year, up 23% from the same period in 2008.
Newegg’s preliminary prospectus says the firm has a loyal customer base consisting largely of technology enthusiasts, including professionals, do-it-yourselfers, early adopters and video gamers.
Although the company built its reputation catering to tech geeks, its product lineup now goes well beyond computers to include such items as digital cameras, cookware and electric shavers.
The company got financing in 2005 from venture capital firm Insight Venture Partners, which also has backed Twitter.
Newegg said it would use the proceeds of the planned stock offering to expand its foreign sales, including in China, to boost working capital and to repay an $8.6-million loan from Chang.
The firm said it expected China to be “an important driver of our future growth.” Chinese sales were $54.4 million in the first half of this year, about 5% of total sales.
Chang’s initial venture was a firm called ABS Computers, which made high-end PCs and gaming systems and sold them by mail order.
He shifted course and launched Newegg after concluding that customers would rather buy components and make their own computers. The name Newegg was chosen to signify a fresh start.
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