Webvan delivers on the Street
The online grocer's stock jumps out of the gates on its first day of trading, more than doubling its set price before tapering off.
The long-awaited issue, delayed twice in the last two months, priced yesterday at $15 per share. Webvan's stock opened at 26 today on the Nasdaq and reached as high as 34. At 26, the company has a market capitalization of $8.45 billion.
Webvan was originally expected to issue its first public offering last month, but delayed the offering because of regulatory concerns. The company agreed with the Securities and Exchange Commission to delay the offering because of the "significant publicity" that surrounded the IPO.
The company delayed the offering again earlier this week, presumably because of investor interest. Yesterday, the company raised the price of its shares from the $11 to $13 range to the $13 to $15 range.
Webvan raised $375 million yesterday by selling 24 million shares.
Founded by Borders bookstore cocreator Louis Borders, Webvan received backing from several high-profile investors, including venture capitalists Benchmark Capital and Sequoia Capital, and newspaper giant Knight Ridder.
Based in Foster City, California, the company currently operates solely in the San Francisco Bay Area, but plans to expand into some 26 new markets throughout the next two years. As part of those expansion plans, Webvan has placed a $1 billion order with engineering firm Bechtel to build automated distribution centers in its new markets.
Webvan lost $35.1 million during the six months ended June 30 on revenue of $395,000. Last year, the company reported no revenues and lost $12 million.