Deals Under $25 Spotify Wrapped Apple's 2022 App Store Awards Neuralink Brain Chips: Watch Today Kindle Scribe Review World Cup: How to Stream '1899': Burning Questions Immunity Supplements for Winter
Want CNET to notify you of price drops and the latest stories?
No, thank you
Accept

HomeGrocer IPO gets lukewarm reception

HomeGrocer.com didn't set the world on fire Friday in its initial public offering, moving up a modest 2 1/8 to 14 1/8.

Friday's IPO saw 22 million shares offered. The company previously said it would price at $10 to $12 a share.

The deal could give HomeGrocer.com a market capitalization of $1.37 billion, about one-third that of WebVan. WebVan's stock has slipped from its 52-week high of $34 a share to $12.50.

The market isn't ready for another dotcom grocer, said David Menlow of IPOfinancial.com. "The market will take it, but it won't reward investors in the stock," he said. "It doesn't have a viable platform for sustained growth."

HomeGrocer.com had a net loss of $7.9 million for the fiscal year ended Jan. 2, 1999, and $84.0 million for 2000. Startup expenses for the customer fulfillment centers it plans to open over the next few years will sustain losses and negative operating cash flow for the foreseeable future, the company said.

Net sales for 1999 were $21.6 million, as opposed to $1.1 million in 1998.

Amazon.com (Nasdaq: AMZN), the company's largest shareholder, will market its service under an advertising agreement. HomeGrocer.com also has a deal with America Online (NYSE: AOL) under which its services will be prominently featured on the AOL sites in exchange for about $60 million over the next five years.