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Buy.com Plans New Stock Sale

30 Dec, 2005 By: Holly J. Wagner

It's not d?j? vu. Buy.com is headed for an initial public offering ... again.

Actually, Buy.com went public in October 1999 and was among the early e-commerce high-flyers to rise on investor excitement about all things Internet.

But just two years later, founder and CEO Scott Blum, who had sold the company at its peak, bought it back for a fraction of the selling price and took it private.

Now the company's stock has been approved for trading under the symbol BUYY, and shares in the IPO will be priced at $8 each. That's down from the $11 to $13 price Buy.com executives initially hoped to set. The company intends to sell 4.17 million shares in the offering, according to a filing with the U.S. Securities and Exchange Commission.

After the IPO, Blum and his affiliates will control 76.5 percent of the company's outstanding stock.

The company expects to raise $29.6 million and plans to use $25 million of it on advertising to heighten brand awareness. That campaign already began with newspaper ads launched in September and TV ads launched in October. The company also plans to go after younger consumers, a drive started with the acquisition of social networking shopping site Yub.com. Future plans include development of a third-party selling area on Buy.com's cyber-real estate.

In the same filing, the company noted it has lost money every year since returning to private ownership.

In the years ended Dec. 31, 2002, 2003 and 2004, the company had net losses of $22.7 million, $25.6 million and $15.4 million, respectively. For the nine months ended Sept. 30, 2005, Buy.com had a net loss of $8.5 million and, as of Sept. 30, 2005, an accumulated deficit of $418.1 million, according to the filing. Blum has had to make personal guarantees to some vendors to keep the pipeline open.

Thomas Weisel Partners and Stifel Nicolaus are underwriting the IPO.

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