Barnesandnoble.com (Nasdaq: BNBN) made its market debut at 25 Tuesday after pricing its IPO of 25 million shares at $18 a share. Shares were up 6 to 24 in afternoon trading.
The initial 39 percent pop in Barnesandnoble.com could be attributed to two reasons. For starters, Internet stocks have been sluggish of late. But the primary reason could be the sheer girth of number of shares offered.
Barnesandnoble.com's 25 million shares are more than double the 10 million shares offered by Priceline.com Inc. (Nasdaq: PCLN). Most Internet IPOs have shares outstanding in the 5 million range.
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Demand for Barnesandnoble.com was expected to be strong. Goldman Sachs upped the price range to $16 to $18 from $11 to $13 earlier on Monday.
Analysts said Barnesandnoble.com's offering was anxiously awaited as Wall Street looks for the next Amazon.com Inc. (Nasdaq: AMZN).
"Barnesandnoble.com will do well because it has a brand name, but it's about two years behind Amazon," said Steven Tuen, research director for IPO Value Monitor.
Not surprisingly, Amazon and Barnesandnoble.com sound a lot alike.
In regulatory filings, Barnesandnoble.com said it plans to expand into new markets such as music, video and software. It also plans on pursuing acquisitions, joint ventures and other similar strategic investments and relationships with complementary businesses and companies.
Amazon has expanded its product offerings and bought stakes in upstarts such as HomeGrocer.com, Pets.com and Drugstore.com.
But Barnesandnoble.com derived 98 percent of its revenue from bookselling in 1998. The company launched its magazine and software online stores during 1998, and began a limited introduction of music and video products in late 1998. The full rollout is scheduled for 1999.
Barnesandnoble.com's first quarter sales were $32.3 million compared Amazon's $293.6 million. Barnesandnoble.com said it is still trying to catch up to Amazon, citing Amazon's "longer online operating history and larger existing customer base."
Barnesandnoble.com lost $20 million in the first quarter. For 1998, Barnesandnoble.com lost $83 million on sales of $61.8 million. Since inception, the company has accumulated net losses of $116.9 million through March 31.