Drugstore raises $102 million in secondary offering

The offering comes as the market for consumer e-commerce stocks is plummeting and the online pharmacy's shares are well off their high.

2 min read
Drugstore.com raised $102.6 million in a secondary public offering earlier this week.

The Amazon.com-backed company sold 6 million shares at $18 a piece, raising $108 million before expenses. Separately, the Drugstore.com Foundation, a charitable organization established by the company, sold another 20,000 shares of Drugstore.com stock.

The offering comes as the market for consumer e-commerce stocks has plummeted. E-tail bellwether Amazon's stock, for instance, is down 36 percent from its 52-week high, set in December.

Meanwhile, Drugstore's stock has fallen more precipitously. The company reached its 52-week high of $70 in July on its first day of trading. Last month, when it filed for its secondary offering, the company's stock was at $27.75, or more than 60 percent below its peak.

On Tuesday, the day of the Drugstore.com's secondary public offering, its stock dropped to its 52-week low of $14. Today, the company's stock was up $1.38 to $16.5.

The offering nearly doubled the number of Drugstore.com shares in circulation, bringing the total number to 13.11 million.

Drugstore.com lost $115.8 million on $34.8 million in revenue last year, its first year selling on the Web. The company lost $8 million on no revenue from its inception in April 1998 to December 31, 1998.

Amazon owns 23.8 percent of Drugstore.com, down from a 26.8-percent stake prior to the offering. Brick-and-mortar pharmacy chain Rite Aid owns 17.9 percent of the Bellevue, Wash.-based company, down from 20.3 percent.

Other investors include venture capital firm Kleiner Perkins Caufield & Byers, which owns 13.5 percent; General Nutrition Companies, which owns 5.7 percent; Paul Allen's Vulcan Ventures, which owns 4.4 percent; and Drugstore.com chief executive Peter Neupert, who owns 3.7 percent.