Preview Travel floats more shares
At a time when Internet stocks are surging, the travel site says the number of shares being offered in its upcoming secondary offering has increased.
The total number of shares being offered was increased to 3.5 million. The online travel company will offer 1.5 million shares, and another 2 million shares will be sold by certain stockholders, according to a regulatory filing with the Securities and Exchange Commission. Preview Travel expects the offering to commence in mid- to late April.
Last week, Preview Travel said it would offer 1.5 million shares, while certain shareholders would sell another 1.5 million, for a total of 3 million.
Based on yesterday's closing price of 34-3/4, the company will raise $52.13 million, excluding expenses. Preview Travel will not receive any of the money raised from the selling shareholders.
Less than five months ago, the travel company raised $27.5 million from its initial public offering of 2.5 million shares of common stock, at a price of $11 a share.
"The principal purpose of this offering is to obtain additional capital," the company said in today's filing.
Preview Travel intends to use some of the net proceeds of the offering to pay a portion of its obligations to America Online (AOL), Excite (XCIT), and Lycos (LCOS), pursuant to the company's agreements with those companies, which require minimum payments totaling $52.9 million over the next five years.
In addition, Preview Travel may use a portion of the net proceeds to license and acquire content for its online sites; to establish additional distribution channels; to expand into international markets; and to acquire or invest in complementary businesses, products, services, or technologies, according to the filing.