Financial Post - Tuesday August 1, 2000
By Scott Adams
Mystery deal in the works, according to CEO
Bid.Com International Inc.'s balance sheet is showing signs of serious cash burn, but the company said
yesterday it is not ready to join the ranks of dot-com firms that have gone bust.
The Internet auction company disclosed on Thursday that its cash reserves fell to $9.1-million for the
second quarter ended June 30.
Given that the company's cash at the end of the first quarter was $12.9-million and that it raised
$3.1-million in a financing during the second quarter, it looks as if Bid.Com went through about
$7-million in the quarter alone.
At that rate, the company will soon be out of cash, but Jeff Lymburner, Bid.Com's president and chief
executive, said the firm should have no trouble making it through the year.
"We're comfortable we have enough cash to get through the year," he said. "There is a great deal I
can't discuss which suggests we will be in very healthy shape by that stage."
Bid.Com's revenue for the second quarter fell to $3-million, down from $6.3-million in the same quarter
last year and $6.6-million in the first quarter this year. The net loss was $7.1-million for the second
quarter, compared to $7.8-million in the first quarter.
Bid.Com is exiting the consumer auction business, where it was losing millions of dollars competing with
the likes of eBay Inc., and entering the business-to-business auction sector, where it has agreements
with PricewaterhouseCoopers and GE Capital.
Mr. Lymburner said the company completed most of its transition in the second quarter and will be out
of consumer auctions by year-end. The cash burn rate will improve by a "significant amount" in coming
quarters, he said, adding that Bid.Com has no plans for layoffs and is still expanding.
In the quarter, Bid.Com raised $3.1-million through U.S.-based Acqua Wellington Value Fund. It raised
$17.1-million last fall. If Bid.Com believes it will run low on cash, it could raise more funds through
investors such as Acqua, Mr. Lymburner said.
Yesterday Yorkton Securities Inc. kept its "underperform" rating on the stock (BII/TSE), with a bearish
target of $1.50. The stock fell 15¢ yesterday to close at $2.79.
sadams@nationalpost.com |
