Buy.com buying Net cell phone retailer
Jumping on the wireless bandwagon, the Internet superstore agrees to buy Telstreet.com, an online retailer that sells cellular phones and other related services.
The deal will give online superstore Buy.com a new product category in its network of 10 shopping sites, which include computer products, software, books and music. Operations at Telstreet, based in Indianapolis, will be folded into Buy.com.
Under terms of the deal, Buy.com will issue about 1.6 million shares of its common stock, worth $8 million at today's market close, in exchange for all of Telstreet's outstanding capital stock and options.
The deal comes after Buy.com, which has used lower prices as a means to compete against other online stores, has languished in the stock market in recent months, along with the overall e-commerce sector. Shares of the company closed unchanged at $5, near their 52-week low, and a far cry from the company's peak in February, when it first sold to the public.
The wireless retail market has exploded in the last year. Forrester Research predicts that revenues from wireless sales will reach $101.2 billion in 2005, up from $42.6 billion in 1999.
The acquisition "provides a rapid entry to the wireless category in the United States," said Greg Hawkins, chief executive of Aliso Viejo, Calif.-based Buy.com.
The company, which says it offers more than 850,000 products on its sites, launched a wireless store in Australia earlier in the year.