Buy.com Files Again for IPO, Expects to Raise $168 Million

Buy.com Inc., the nation’s largest privately held Internet retailer, said Thursday that it expects to raise as much as $168 million in its initial public offering, selling 14 million shares at $10 to $12 each.

The offering would value the Aliso Viejo company, which racked up losses of $80.5 million in the first nine months this year, at $1.42 billion if the shares are priced at $11, the middle of the anticipated price range. The company said it will have 129.1 million shares outstanding after the stock sale.

Buy.com initially disclosed plans to go public in October, estimating then that it would raise as much as $150 million. At the time, Buy.com didn’t provide details on the number of shares to be sold or the price per share.

The stock offering will raise $168 million before expenses if shares sell at the top of the estimated price range, according to documents filed Thursday with the Securities and Exchange Commission. Buy.com said it would raise $141.6 million after offering expenses if the shares sell for $11 each.

The stock offering is one of the most anticipated by a Southern California Internet firm.

Buy.com, promising “The Lowest Prices on Earth,” often sells computers, software, videos, books and other merchandise at or below cost to lure traffic to its Web site. Initially, the company hoped to make money solely from selling advertising on the site. Since June, however, the company has changed its strategy, offering a select group of aggressively priced products while promoting associated higher-margin items.

The company generated revenue of $397.6 million in the year’s first nine months, although the strategy of selling products at the lowest possible price meant that the cost of products sold actually exceeded the amount of sales they generated for several months.

By comparison, Amazon.com Inc., the largest Internet retailer, has lost $397 million on revenue of $964 million over the first nine months of this year.

The stock market values Amazon at $32.3 billion.

Buy.com, which was founded two years ago, will use as much as $90 million for sales and marketing, with the remaining funds devoted to capital expenditures, debt repayment and general corporate purposes.

Merrill Lynch & Co. is underwriting the stock sale along with Bear, Stearns & Co.; Hambrecht & Quist; and U.S. Bancorp Piper Jaffray.

Buy.com will seek to have its shares trade on the Nasdaq Stock Market under the symbol BUYX.