Webvan Downplays CEO’s Comments Before IPO
About those comments from the chief executive--never mind.
That’s what Webvan Group Inc.--seeking to repair fallout from publicity on its pending stock sale--said Tuesday, advising potential investors to disregard recently published comments by new CEO George Shaheen.
The comments appeared this month in a Forbes magazine article about Webvan’s widely anticipated initial public offering. The online grocer, established by Louis Borders, co-founder of the Borders bookstore chain, expects to raise as much as $325 million.
Webvan delayed the IPO last week, after the Securities and Exchange Commission raised questions about the publicity, a potential violation of restrictions on companies hyping their own stock. In an unusual move, Webvan has updated its IPO documents to include some of the published information and disavow responsibility for the coverage, a move that could help the company obtain SEC clearance to sell shares.
“I’m a little hurt,” quipped Dennis Kneale, an editor at Forbes. “I notice they didn’t say [Shaheen] didn’t say it--I guess they just kind of wish he hadn’t.”
Shaheen left his job as chief executive of Andersen Consulting to assume the same position at Foster City, Calif.-based Webvan, according to a news release issued last month. In the Forbes article, he said, “Webvan was all about leveraging technology and reinventing the grocery business, just as Andersen had reinvented consulting.”
Such statements could be construed by the public as a plug for Webvan before SEC clearance of the registration statement for the IPO. The touting of stocks before SEC approval, known as “gun-jumping,” is prohibited by securities law.
In Tuesday’s filing, Webvan said these and other comments by Shaheen weren’t intended to be relied upon by potential investors.
“You should not rely on the information in the Forbes article or on any other information not contained in this prospectus,” Webvan said in the SEC filing.
Webvan also cautioned investors not to heed financial projections for the company published on Oct. 6 by “a securities industry Internet periodical.” That was seen as a reference to TheStreet.com, which ran a story this month that described projections Webvan gave out in a conference call with prospective investors.
The company noted that Adam Lashinsky, author of the Web site’s article, “was not invited to participate in the conference call.” Further, the article presented the information in isolation and didn’t include related risks and uncertainties that often accompany financial projections, according to the filing.
