From WSJ:
Shares of PlanetRx, San Francisco, opened at $31.50 after pricing at $16
each Wednesday, above price estimates of $12 to $14 a share. The shares
closed at $26.
The strong opening came as a surprise to
analysts. While they expected a good deal,
PlanetRx is the second company in the online
pharmacy to launch an IPO, and usually the second to market gets far less
enthusiasm.
PlanetRx competitor Drugstore.com Inc. more than tripled its offering price
when it began trading. Drugstore.com also had bigger backers, including
investments from Amazon.com Inc., Microsoft Corp., Rite Aid Corp. and
funding from marquee venture-capital firm Kleiner Perkins Caufield &
Byers.
But health care is a large enough market that being second in the sector
isn't that bad, said Ben Holmes, president of ipoPros.com, a Boulder,
Colo., firm that tracks new issues.
"There's certainly more room in that space for more than one company," he
said.
Like, Drugstore.com, PlanetRx comes to market with its own set of
important investors. Top-tier Silicon Valley venture capital firms
Benchmark Capital Management and Sequoia Capital each owns more
than 10% of the company, while Christos Cotsakos, chief executive of
E*Trade Group Inc., is also an investor and board member.
Markas Holding, the firm controlled by European investor and LVMH
Moet Hennessy Louis Vuitton chairman Bernard Arnault, owns a 5.5%
stake.
PlanetRx also has a relationship with pharmacy benefits manager Express
Scripts Inc. With the completion of the offering, PlanetRx will buy the
YourPharmacy.com online operations of Express Scripts. PlanetRx will be
the online pharmacy for Express Scripts, which, in turn, will own 20% of
the company. Barrett Toan, chief executive of Express Scripts, will also
join PlanetRx's board.
PlanetRx only began operations early this year, and, like many new
Internet offerings, the company has thin revenues and heavy losses. For the
first six months of this year, the company lost $20.1 million on revenue of
just $817,000.
The company has 50.8 million shares outstanding after the offering. |
