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eToys rallies up 283 percent in debut

Shares of eToys Inc. (Nasdaq: ETYS) closed up 56 9/16, or 283 percent, to 76 9/16 Thursday in its first trading day. Shares opened at 78 after pricing last night at $20 a share.

EToys priced its 8.2 million share initial public offering at $20 a share, above the $17 to $19 a share range.

EToys in April bought Babycenter Inc. in a move to boost its product line. However, eToys will carry $180.7 million in goodwill from the Babycenter purchase amortized over five years. Including Babycenter, eToys had a loss of $73 million on sales of $34.7 million for the year ending March 31. Without Babycenter, eToys reported a loss $28.5 million on sales of $29.9 million for the year.

And the red ink will just keep flowing. "We anticipate our losses will increase significantly from current levels," said the company in a regulatory filing.

In addition, the competition isn't about to give eToys an Amazon-ian headstart. Toys "R" Us is getting Net religion and spinning off its Web unit. Also, Consolidated Stores, the parent company of KBToys, is combining with, an online toy seller.

Goldman Sachs was the lead underwriter for the eToys offering.>