Ian Andrew Bell
Mon, 13 Aug 2001 17:39:42 -0700
------ Forwarded Message
From: Ian Andrew Bell <email@example.com>
Date: Mon, 13 Aug 2001 17:38:36 -0700
Here's a great strategy:
Come up with an idea for a company that sells $1 bills for $0.80, raise $20=
Million from VCs, take the company public, sell your stock for a huge
profit, resign from the company, watch the company die, and then buy the
whole thing back for $23 Million.
How is this legal?
>From $3 Billion to $23 Million: Buy.com Bought by Founder =A0=A0
by Anna Dorfman
Online superstore Buy.com (Nasdaq: BUYX) was a sinking ship the last six
months, as its Chairman and CEO, CFO and several board members resigned, 15=
staffers were laid off, and international offices in Canada and the U.K.
were shuttered. This week, the company, which is currently facing a
shareholder lawsuit for securities fraud and possible Nasdaq de-listing, go=
a reprieve from Founder Scott Blum.
Blum has stepped forward, through his company SB Acquisition, to=A0acquire th=
Aliso Viejo-based operation for 17 cents per share--its closing price on
Friday--or about $23 million in cash. This is a sad ending for an enterpris=
that raised $209 million through its initial public offering in Feb. 2000,
when it had a market cap topping $3 billion. Its current market cap is $23.=
As part of the buyout, Blum's SB Acquisition will also provide the
struggling firm with immediate relief to the tune of $9 million in interim
financing, subject to certain conditions. The transaction is structured as =
Both SB Acquisition and Buy.com's boards have unanimously agreed to the
merger, and the deal is expected to close before Nov. 30, 2001. Buy.com's
stockholders still have to give their vote of approval.
The much hyped Buy.com, which gained prominence by underpricing other
e-tailers--so much so that it was reportedly losing money on every sale, sa=
its stock fall precipitously once the market collapsed, from $35.44 per
share in 2000 to an all-time low of 15 cents per share this month. In the
three months ended March 31, 2001, the company's net revenues fell 40
percent to $124.6 million, while net loss rose 38 percent to $45.2 million.
Buy.com's stock value was unchanged at 17 cents per share at today's market
------ End of Forwarded Message