SoCal online retailer Newegg.com plans IPO
This article was originally on a blog post platform and may be missing photos, graphics or links. See About archive blog posts.
With the market for new stock offerings heating up, City of Industry-based online tech products retailer Newegg.com is looking to cash in.
The fast-growing company, which sells computers, software and consumer electronics, filed today to go public. In a preliminary prospectus, parent Newegg Inc. said it planned to raise as much as $175 million.
It didn’t list the expected stock price or the number of shares to be sold. JPMorgan, BofA Merrill Lynch and Citi will manage the deal.
The company was founded in 2001 by Fred Chang, a Taiwanese immigrant. Chang’s initial venture was a firm called ABS Computers, a mail-order computer company that made high-end PCs and gaming systems.
But as The Times noted in a profile of Newegg in 2007, ‘Customers indicated that they’d rather buy components and make their own computers. So even though the Internet bubble was deflating, Chang launched a new company and called it Newegg, to signify a fresh start.’ Despite intense competition, the company’s sales have ballooned since 2001, to $2.1 billion in 2008. Newegg says it has been profitable from the start, earning $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 says in the prospectus that it has a ‘loyal customer base consisting primarily of IT professionals, gamers, do-it-yourself technology enthusiasts, early technology adopters and consumer electronics enthusiasts.’
Although the company built its reputation catering to tech geeks, its product lineup now goes well beyond computers, to digital cameras, cookware, electric shavers and other stuff.
The company in 2005 got financing from venture capital firm Insight Venture Partners, which also has backed Twitter.
Newegg said it planned to use the money it raises in the stock deal to expand its foreign sales, including in China, boost working capital and repay an $8.6-million loan from Chang.
The firm expects 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.
-- Tom Petruno