WBVN update -
WBVN in the most recent quarter burnt through 40 MM (in the P/L statement). At the end of the quarter it had 540 MM in cash and marketable securities. A first glance at these numbers will lead one to think that WBVN has enough resources for more than 3 years. This is incorrect.
Currently WBVN is operating in the San Fransisco Bay Area only. They are working on a nationwide rollout. The problem for WBVN is it uses warehouses which are expensive to build. Advertising on a larger scale (in the new markets) will cost $$$.
Note (in the balance sheet) that cash and marketable securities dropped by 100 MM in the mrq. The difference was spent on capital expenditures. IMO Webvan will have to raise more money in less than 12 months. It will be very difficult for a B2C company to raise large amounts of cash.
On May 1st (Monday), Webvan is scheduled to launch in the Atlanta area. This launch coincides with the expiry of the lockup period on all the remaining restricted shares. I am hoping for some analysts to pump the stock early next week. The PRs and any associated hype will give us a good opportunity to sell shares (which we don't own).
I am not currently long/short WBVN
Regards,
Rajiv
Details of the Lockup restrictions
According to the lock-up agreements, at any time beginning on the third day
following the public release of our earnings for the year ended December 31,
1999, each stockholder may offer, sell, transfer, assign, pledge or otherwise
dispose of up to 15% of his or her shares owned as of December 31, 1999; and at
any time beginning on the 48th day following the public release of our earnings
for the year ended December 31, 1999, each stockholder may offer, sell,
transfer, assign, pledge or otherwise dispose of an additional 25% of his or her
shares owned as of December 31, 1999. The lock-up restrictions will expire as to
the remaining shares on the date which is 180 days after the date of this
prospectus. Notwithstanding possible earlier eligibility for sale under the
provisions of Rules 144, 144(k) and 701, shares subject to lock-up agreements
will not be salable until such agreements expire or are waived by Goldman, Sachs
& Co. Taking into account the lock-up agreements, and assuming Goldman, Sachs &
Co. does not release stockholders from these agreements, the following shares
will be eligible for sale in the public market at the following times:
- Beginning on the date of this prospectus, only the shares sold in the
offering will be immediately available for sale in the public market.
- Beginning on or about February 1, 2000 (the third business day following
the public release of Webvan's earnings for the year ended December 31,
1999), approximately 2.9 million shares will be freely tradeable pursuant
to Rule 144(k), and an additional 38.1 million shares will be eligible
for sale subject to volume limitations, as explained below, pursuant to
Rules 144 and 701.
- Beginning on or about March 16, 2000 (45 days following the initial
lock-up expiration period), an additional 4.8 million shares will be
freely tradeable pursuant to Rule 144(k), and an additional 63.6 million
shares will be eligible for sale subject to volume limitations, as
explained below, pursuant to Rules 144 and 701.
- Beginning 180 days after the date of this prospectus, an additional 11.6
million shares will be freely tradeable pursuant to Rule 144(k), and an
additional 152.6 million shares will be eligible for sale subject to
volume limitations, as explained below, pursuant to Rules 144 and 701.
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