Overstock.com terminates stock offering announced this week
Overstock.com Inc. has terminated an agreement to issue 700,000 shares of its common stock at $24 per share, or $16.8 million. The company just announced the sale this week.
After the announcement, Overstock on Tuesday received a subpoena from the Securities and Exchange Commission requesting a broad range of documents, including all documents relating to the company’s accounting policies, targets, projections, estimates, recent restatement, new technologies, and communications with and regarding analysts. Overstock and the buyer conferred and the buyer decided to wait for at least a few weeks before reconsidering the deal; Overstock then terminated the deal and is awaiting further consideration, a company investor relations spokesman says.
The company had said it planned to use the net proceeds of the offering primarily for general corporate purposes and working capital requirements, including sales and marketing activities. Overstock.com is comfortable with its cash position for 2006, but several parties made overtures regarding the placement of additional capital into the business and it decided it would be prudent to accept, the company originally said.
Overstock.com grew sales 62.5% to $804 million in 2005 compared with $494.6 million in 2004.
Overstock, No. 18 in the Internet Retailer Top 500 Guide to Retail Web Sites, reported earlier this month that it had raised $25 million through the issuance of about one million shares of stock.
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