CarsDirect.com's IPO plans stall
The online auto seller's plans for an initial public offering come to a halt after it announces that it will postpone its Wall Street debut.
The Los Angeles-based company withdrew the registration it filed in May with the Securities and Exchange Commission, based on "unfavorable conditions in the public equity market," the company said in a statement issued Wednesday afternoon.
"Market conditions today are simply unreceptive to new offerings, prompting us to delay our IPO," said chief executive officer Bob Brisco.
CarsDirect.com operates a Web site that allows consumers to research, finance and purchase new cars and trucks. In many cases, the consumer must go to one of 2,500 affiliated dealerships around the country to pick up their vehicle, but they do not have to spend any time in the dealership before the actual delivery.
The postponement shouldn't surprise investors, who have scorned e-commerce companies since the stock market's broader collapse in April. Online automobile retailers have been particularly stung.
CarsDirect.com competitor Autoweb.com is now trading at 44 cents per share, down 96 percent since the beginning of the year. Autobytel.com is now trading at $2.25 per share, down 85 percent since Jan. 1.
CarsDirect.com executives were not immediately available to comment on the postponement, but Brisco said in the news release that the company still has plenty of cash.
When it filed IPO plans with the SEC in May, the company said it had an unaudited net loss of $72.3 million in 1999 on revenues of $15.2 million. The company also had a net loss of $43.1 million on revenues of $98.5 million for the first three months of this year.