September 28th, 2009
Newegg announces IPO, plans for expansion
Online electronics retailer Newegg is going public, launching an IPO estimated at $175 million, according to a filing with the Securities and Exchange Commission today.
The retailer has largely been focused on IT products such as hardware, software and peripherals since its launch in 2001 but recently has expanded into the consumer electronics business and products that are targeted at small- to medium-sized businesses. It has also expanded beyond the U.S., moving into Canada and China.
Last year, it reported net sales of $2.1 billion. In its SEC filing, the company summed up its outlook on the growth potential for online retail sales in its core target markets:
We believe that IT and CE products are well suited for online sales because these products often require a potential customer to research, evaluate and compare a large amount of technical information, product features and consumer reviews, tasks which can be much more comprehensively and efficiently accomplished online. In addition, buying patterns are generally transitioning online as broadband adoption increases, fulfillment capabilities of online retailers become more reliable and consumers and businesses face continuing pressure to save money.
In its filing, the company said it would use proceeds from the offering to expand international operations, including the building of its headquarters in Asia and a regional warehouse, pay off debt and other improvements, such as IT infrastructure upgrades, branding and marketing campaigns and acquisitions of or investments in “complementary businesses, products, websites or technologies.”
The company noted that it is not presently engaged in any discussions about such acquisitions or investments.
Sam Diaz is a senior editor at ZDNet. See his full profile and disclosure of his industry affiliations.
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