Newegg files for IPO, expects to raise $175 million

By on September 28, 2009, 3:10 PM
Venture capital-backed electronics e-tailer Newegg hopes to raise $175 million in an initial public offering, according to a regulatory filing. In the US Securities and Exchange Commission filing, Newegg says it has been profitable every year since 2001, and claims to have generated $2.1 billion in sales last year alone -- not bad for an e-commerce operation who's in direct competition with behemoths like Amazon and Best Buy.

The California-based company expects to face increase opposition from other e-commerce businesses, including Circuit City. Although it went bankrupt not long back, Systemax (the owner of TigerDirect and CompUSA) purchased Circuit City and brought its website back to life.

Newegg's largest shareholder is venture-capital firm Insight Venture Partners, which holds a 12.7% stake in the company after handing it $20 million in 2005. Newegg plans to expand operations in China and Canada with the IPO-raised funds. The IPO is being managed by JP Morgan, Bank of America Merrill Lynch and Citi.

User Comments: 9

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ColdFusion1990 ColdFusion1990 said:

Whatever helps keep Newegg going, I'm excited for

red1776 red1776, Omnipotent Ruler of the Universe, said:

Newegg is a model of customer service and shoppeability...hmmmm...i think I just Shakespeare'd all over myself, anyway, I'm in for some shares.

Guest said:

Newegg Rocks!

TomSEA TomSEA, TechSpot Chancellor, said:

I wonder why they've decided to go public? With 2.1 billion in sales annually, it's not like they really need some sort of financial boost.

Julio Franco Julio Franco, TechSpot Editor, said:

I'm sure that at some point some of the investors and people involved in the company wanted to cash out big, though it's been said that the company has been profitable for many years now. Newegg has tremendous potential, they are a top online retailer that truly understands customer service, but most importantly has a huge community behind it. Come to think about it, the user comments you find there are invaluable - usually much more insightful on average than Amazon's or other wide-scope retailers.

It will be interesting to see how their post-IPO expansion moves, as you can expect them to start selling in more categories and finally, selling in more countries.

Guest said:

This is great news! I'll be getting some shares...maybe...if I can afford it. =)

TomSEA TomSEA, TechSpot Chancellor, said:

Good points, Julio. I think they have every other online retailer beat hands-down. When it comes to computer and electronics items, I almost exclusively buy from them. And as you mentioned the product reviews are a lot more informative (and accurate) than what you see on other websites.

But I've seen good companies go public and then down the tubes before, because they stop doing what made them a good company to begin with and become more interested in pleasing their shareholders.

Hopefully that won't happen with Newegg.

Vrmithrax Vrmithrax, TechSpot Paladin, said:

I, too, am a die-hard Newegg consumer. I've built dozens of computers for myself, friends & family using only Newegg for my hardware supply. Their customer service is dynamite, if you have a problem, they fix it as quickly as they can. But even just the shopping/research experience is outstanding, from the very flexible and intuitive search filter options (which beat the pants off the competition), to the very helpful reviewing system.

One of the reasons Newegg's reviews are so useful is that they are relevant. Amazon's weird editorial-wannabe user base is constantly throwing in rants or reviews of things that aren't even released yet, and there seems to be no moderation or filtering of any kind. I believe Newegg at least moderates to make sure the reviews are pertinent to the product, and not just some flake up on a soapbox spouting venom or fanatical worship.

Let's hope Newegg can keep their superior format into the future. I'd hate to have to find a new source for my PC building habit!

windmill007 said:

I agree with everyone. I think other companies should build there websites like Newegg. I would prob shop more at amazon but I absolutely hate trying to use there search filters or review anything on there site. I usually make my decision elsewhere and maybe buy from amazon if its not a computer product. if it is...Of course I buy from the egg. It's unbelievable how far ahead they are above everyone. Every time I have any problem they fix me right up. No questions asked.

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