B2Bstores.com Shares Soar 25% in 3rd Day of Trading
Talk about a delayed reaction.
Shares of B2Bstores.com Inc., a Long Beach online start-up whose Wall Street debut Tuesday was a dud, have soared 57% the past two days, including 25% on Thursday.
The company, which hopes to sell supplies and services to business customers, saw its shares gain $2.56, to $12.75, in Nasdaq trading Thursday. B2Bstores fetched $8 a share in its initial public offering, but managed only a small gain--to $8.12--in first-day trading Tuesday.
Tom Taulli, an analyst with Internet.com, tied B2Bstores’ rise to being in the right place--the business-to-business (B2B) arena--at the right time.
“I think this [movement] is more about the company having the foresight to call itself B2Bstores.com than anything else,” Taulli said. “Some people evidently saw the B2B and ‘dot-com’ and figured this was a good company, but this deal really smacks of someone trying to jump on the bandwagon.”
According to company filing with the Securities and Exchange Commission, B2Bstores intends to initially sell janitorial supplies and subsequently expand into such services as 401(k) and accounting referrals. The start-up reported no substantive revenue during five months as a private company, and lost $2.9 million.
B2Bstores founders said in SEC filings that, absent a successful IPO, the company might not be able to remain in business. The lion’s share of the offering’s proceeds--$16 million--were earmarked for marketing and advertising, according to the SEC.
The company’s underwriters had hoped to raise $32 million by selling 4 million shares at $8.
Company officials did not return a call seeking comment Thursday.
A Motley Fool newsletter writer earlier this week noted that the hot IPO market is driving some investors to act as if they were venture capitalists, “assuming all of the same risks along the way.”
“There’s not much behind this company from what I can see,” Taulli said.
“Its management hasn’t been that much a part of the high-tech arena, and there seem to be conflicts of interest running through the company.”
E-commerce analysts agree that there’s plenty of room for newcomers in the business-to-business area. The category is expected to mushroom into a $2.7-trillion online sector by 2004, according to Forrester Research Inc., a Cambridge, Mass., market research firm. B2B market growth is being driven by the dramatic rise in companies turning to the Internet to buy and sell goods and services.
A Forrester poll of executives at large companies showed that 90% now plan to eventually buy and sell over the Net. Forrester’s survey shows that existing sales and distribution channels will be dramatically refashioned as buyers and sellers search out cost-effective alliances.
