Newegg wants to hatch an IPO

Posted Sep 29th 2009 1:00PM by Tom Taulli
Filed under: Citigroup Inc. (C), JPMorgan Chase (JPM), Bank of America (BAC)

Newegg, which is an electronics e-commerce site, got its start back in 2001, when the dot-com industry turned into a dot-bomb disaster. But the timing was brilliant as the company built a thriving business.

In fact, Newegg thinks the timing is also right for an IPO, which the company filed for this week.

Newegg sells things like hardware, software, peripherals, and consumer electronics. Interestingly enough, the company is the number two online-only retailer in the U.S. -- generating $2.1 billion in sales last year. Oh, and the company has been profitable since inception.

How did Newegg find success in such a competitive market? The company has strong customer service, a broad selection, extensive product reviews, a high-end supply chain, good pricing, and effective marketing. Keep in mind that 74.1% of U.S. orders came from customers without incurring a referral, advertising, or click-through fee.

And with the IPO proceeds, Newegg plans to continue its aggressive growth plans. A big part of this is moving into China. Already, Newegg has posted $54.4 million in sales in the country for the first half of this year.

The underwriters on the IPO include JPMorgan (NYSE: JPM), Bank of America/Merrill Lynch (NYSE: BAC), and Citigroup (NYSE: C).

Tom Taulli is the author of various books, including The IPO Primer and The Complete M&A Handbook.

Tags: BAC, Bank of America, Citigroup, inthenews, IPO, JPM, JPMorgan, Newegg

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Reader Comments (Page 1 of 1)

9-29-2009 @ 4:52PM

Iridium said...

It's sad. The IPO will ruin the company because the drive for maintaining healthy profit while giving consumers good prices will turn to a drive to satisfy investors only.

Say goodbye to your profit and independence Newegg. You will become slaves to institutional investors and will not be able to compete when the low prices you give negatively affect your quarterly reports.

Such a shame that greed will ruin another great company.