Founder Plans to Repurchase Outstanding Buy.com Shares

Buy.com Inc. founder Scott Blum, whose stake in the company briefly was worth more than $1 billion after it went public last year, announced plans late Friday to buy back the money-losing online retailer, now with a market value of just $23.2 million.

In a terse release, Buy.com said Blum will pay 17 cents a share for the Aliso Viejo company’s stock, its closing price Friday on the Nasdaq market. Blum owns about 37% of Buy.com’s 136.5 million shares, so he will be paying other shareholders less than $15 million.

Blum, 37, is buying the shares through a company he owns called SB Acquisition Inc. As part of the agreement to take Buy.com private, SB will provide Buy.com with temporary financing of up to $9 million, subject to certain conditions, the release said. It didn’t disclose what the conditions were, or what Blum might do to revive the foundering company.

The company said it expects the Blum buyout to close before Nov. 30. Buy.com’s board has approved the transaction, but its shareholders still must vote on it.

Blum and Buy.com executives couldn’t be reached late Friday.

Buy.com aimed to be an online superstore with lots of discounted items available, but as competition and financial pressures mounted, the company gradually raised prices to move toward profitability. That eroded its business.

With losses still widening, Buy.com disclosed in June that Nasdaq officials were seeking to remove its stock from their trading system for failing to meet the $1 minimum price requirement.