September 29, 2009
By the ZippyCart Shopping Carts Content Team
Over the last two years, the IPO market in the US has been extremely slow, due to the weak economy. Luckily things look like they are picking up again as online ecommerce giant Newegg.com is planning an IPO according to an SEC filing. The plan to raise $175 million to help Newegg grow their already successful business with an expansion into Canada and China as well as the repayment of some debt. Newegg feels that China and Canada are huge opportunities to diversify their revenue streams. Newegg is already doing very well with $2.1 billion in sales and $28 million in net income. Profit margins are very tight at only 1.4% which is about half of Amazon.com which is at 3.3%. Newegg knows that Amazon and other major Internet retailers with more cash will still be a threat so this IPO is still somewhat risky. Amazon has such a big head start on Newegg that it will be hard for them to make the right moves to cut into competitors market share.
Newegg stated in their prospectus that it has a “loyal customer base consisting primarily of IT professionals, gamers, do-it-yourself technology enthusiasts, early technology adopters and consumer electronics enthusiasts.” They hope to continue to win over their niche audience so that those loyal followers will influence others to check out Newegg the next time they need to purchase something electronic or computer related. No strike price was reported yet so eager investors will just have to sit back and wait to see how this IPO fairs on the street.
Amy is the co-founder of ZippyCart. She went to school for film in Cleveland, Ohio and ended up working in the field of viral video marketing, which eventually led her to her real profession: SEO. When she's not writing for ZippyCart, she can be found out and about Seattle, WA.
