WSJ's take on the Shopping.com purchase (part 2)
by: soltrader (48/F/Toronto)
48921 of 48935
The purchase price represents a 44% premium to Shopping.com's closing
price Friday of $13.1875 on the National Association of Securities Dealers'
OTC Bulletin Board system; Monday, the online retailer's shares rose $5.4062
to close at a bid of $18.5938. The news boosted Compaq's shares $3, or
6.6%, to $48.375 on the New York Stock Exchange.
The two companies began talks three weeks ago, said Shopping.com President
Frank W. Denny. He said the company, which reported a loss of $18.9 million
on revenue of just $4 million for the nine-month period ended Oct. 31, 1998,
has been cash-strapped. As losses mounted, the company became a revolving
door for top management, with three CEOs in the past eight months. What's
more, trading in its shares was halted for 10 days last year after the Securities
and Exchange Commission launched an investigation of Shopping.com. No
charges were ever filed.
Mr. Denny said the company was dragged into the investigation by the
underwriter, which subsequently went out of business. No charges were ever
filed.
The company's second-largest shareholder is Idealab!, a Pasadena, Calif.,
company that backs Internet startups. Bill Gross, the storied founder of Idealab
and education-software developer Knowledge Adventure Inc., was a
Shopping.com director until March 1998. |
