PRICELINE.COM RESPONDS TO STOCK OVERHANG QUESTIONS
Priceline.com is committed to managing the orderly release of restricted shares into the marketplace. A primary motivation of the recent secondary offering of priceline.com shares was to enable Delta Air Lines and certain early investors in priceline to sell a small portion of their holdings while agreeing to extended lock-ups on the balance of their holdings until February 7, 2000. Only five management shareholders of priceline participated in the offering and they sold less than 2% of their holdings. Jay Walker, priceline.com?s founder, Vice Chairman, and largest shareholder, did not sell any shares in the secondary offering, while nevertheless agreeing to the extended lock-up period through February 6, 2000.
As a result of these extended lock-up agreements, the number of additional shares of priceline.com stock that will become available for sale in the public markets through February 7, 2000 is relatively small compared to priceline?s average daily trading volume of 1.2 million shares per day. On September 26, 1999 only 5.1 million shares will become eligible for sale in the public markets following the termination of the lock-up related to priceline?s Initial Public Offering (compared to approximately 142 million shares that would have become eligible for sale after the expiration of the IPO lock-up prior to the aforementioned lock-up extensions). Another 1.5 million shares will become eligible for sale in October and November. In December and January, 11.6 million shares will become eligible for sale in the public markets, although many of these shares are held by directors of priceline.com or by large institutional investors in priceline?s last pre-IPO venture round.
Priceline is committed to working to manage the orderly disposition of shares that will become available for sale in February 2000 and thereafter, as it did in securing the extended lock-ups from these holders in August. Of the approximately 150 million shares in this category, priceline.com?s directors and executive officers beneficially own approximately 119 million shares. Jay Walker personally beneficially owns approximately 62 million shares, while priceline?s Chairman and CEO, Richard S. Braddock, owns approximately 18 million shares. Approximately half of the remaining shares are covered by warrants that become exercisable in February 2000. Upon exercise of these warrants, the holder of the underlying shares will be restricted under Rule 144 from selling such shares in the public market for a period of one year from the date of exercise, unless such shares are sold under an effective registration statement of the Company. The holders of the group of shares becoming available for sale in the public markets in February 2000 have evidenced their long-term commitment to priceline in the past, and we expect that they will continue to act in a fashion that promotes priceline?s long-term interests in the future in a manner that is consistent with their interests in portfolio diversification. |
