Public Offering in Works for Auto-By-Tel

Auto-By-Tel Inc., which is mounting an aggressive and expensive campaign to become the nation’s premier automobile marketer on the Internet, said Friday that it intends to go public and hopes to raise as much as $55 million with the initial stock offering.

The company, started two years ago by a group that included Pete Ellis, a well-known former Southern California auto dealer, links shoppers with auto dealerships that typically offer special prices to customers who shop via the Internet.

Documents filed Friday with the Securities and Exchange Commission show that more than 1,200 dealerships have signed up with the system and that more than 385,000 requests to purchase cars were fielded by Auto-By-Tel in its first 21 months in operation.

The company’s stock registration statement does not specify how many shares of common stock are to be offered, nor does it establish a target offering price or an offering date. Those details are to be added in a later filing, the company said.

However, the statement says that on Jan. 24 the company established a market value of $8.80 a share when it awarded various employees options to acquire more than 190,000 shares.

The stock offering registration also discloses that co-founder Ellis plans to include in the offering 400,000 of the nearly 6.1 million shares of the company that he holds. Ellis, the company’s major shareholder, has a 38% stake. John Bedrosian, a private investor and former medical management company executive who started the company with Ellis, owns 5.3 million shares, or nearly 34%.

Financial statements included in the SEC filing reveal that the start-up company has lost more than $7.5 million since it began operations, mostly in 1996, when expenses for administration, marketing, advertising, staff training and development of operating systems topped $11 million.

Revenue, almost all from marketing fees paid by dealers who use Auto-By-Tel services, hit $5 million in 1996, up from just $274,000 in the company’s first year.

To help boost revenue, the company says in its SEC filing, it intends this year to launch a used car sales service and to begin leasing and financing new and used cars.

The company’s Web site is https://www.autobytel.com

Montgomery Securities, Cowen & Co. and Robertson, Stephens & Co. plan to underwrite the stock sale. Auto-By-Tel said it intends to have its shares trade on Nasdaq under the symbol ABTL.