The new service, which officially launched today, allows investors to buy shares in Intimate Brands and automatically reinvest dividends into new shares.
Intimate Brands' service is part of a growing trend of companies allowing investors to purchase company stock directly via their Web sites. It also represents another way that the Internet is changing the face of investing.
Investors have been able to buy stocks online for years using such services as E*Trade and Ameritrade. Direct stock investment differs from typical online investing in that it's targeted at long-term investors rather than day traders.
Intimate Brands will not make a profit from the stock purchases, and shares that investors buy will come from the open market rather than from the company, according to company spokeswoman Debbie Mitchell. She said Intimate Brands set up the service to make it easy for Intimate Brands customers to invest in the company.
"We believe that there's a powerful correlation between loyal shareholders and loyal customers," Mitchell said.
Jupiter Communications analyst Robert Sterling said that the direct stock plan had as much to do with promoting Intimate Brands as a Net savvy company as it did with trying to please customers or investors. Sterling connected the move to the company's Web cast fashion show in February.
"Intimate Brands is very Internet conscious, and they want to generate that kind of chatter about themselves," he said. "They've tried to imbue their stock with an Internet mojo over the last few months."
Intimate Brands' stock program is offered through Netstock Direct, which also handles direct stock purchase plans for companies such as General Electric, Home Depot, and Wal-Mart. Some of these companies already allow investors to purchase company stock directly through their Web sites.
To participate in the program, which is administered by First Chicago Trust EquiServe, investors need to sign up for an account on the Intimate Brands Web site and must invest at least $500, which can be spread out over 5 installments of $100 each. Investors can use the program to purchase up to $250,000 worth of Intimate Brands stock per year.
In late-day trading, Intimate Brands was up 0.75 to 43.69.