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Technology Stocks : Softbank Group Corp -- Ignore unavailable to you. Want to Upgrade?

To: ms.smartest.person who wrote (5576)	11/13/2000 12:35:56 PM
From: ms.smartest.person	Read Replies (1) \| Respond to of 6020

Buy.com Tumbles -------------------------------------------------------------------------------- By Dan Biers and Bruce Gilley -------------------------------------------------------------------------------- WHEN NASDAQ was hotter than hot, Softbank could expect huge one-off gains from taking any of its U.S. companies public. To many investors, that showed a company with a Midas touch. But the steep downturn in the tech-laden Nasdaq has suddenly made Softbank look like a much more mortal investor. One of the best examples is Softbank's 29% stake in on-line retailer Buy.com. Founded in the Los Angeles area in 1997 as southern California's answer to Seattle-based on-line retailer Amazon.com, Buy.com billed itself as "the Internet superstore." It sold everything from horror movies to golf balls and opened separate sites for Canada, Britain and Australia. The company went public on February 8 this year, just weeks before a steep downturn in the Nasdaq. Its shares soared from an offer price of $13 to more than $35. At that price, Softbank was sitting on a paper gain of more than $1 billion on its total investment of just under $200 million. Since then, however, the gain has turned into a gaping paper loss. Buy.com shares are languishing at around $2 and Softbank's stake is worth just $80 million. What went wrong? On-line retailing was one of the first sectors to lose support from investors who wanted Internet ventures to stop burning cash and become profitable. The fact that most players in the sector were starting with huge losses made sentiment worse. Buy.com, for example, saw its net loss in the first nine months of this year widen by 20% from a year earlier to $97 million. The company has now postponed indefinitely the launch of sites for France and Germany, in which Softbank was to take a 49% stake. Eric Hippeau, president and executive managing director of Softbank International Ventures, says Softbank has no plans to purge Buy.com from its family. "It just happens that the whole sector is in the tank, and it's in the tank because it overpromised," he says. What Hippeau doesn't say is that a lot of those promises came from initial backers like Softbank itself. feer.com