Bookselling site Alibris announced Friday its auction-based IPO did not produce prices attractive to the company and instead it will rely on recently acquired private capital to achieve profitability. Alibris CEO Marty Manley indicated that a private financing completed in conjunction with the IPO enables the company to continue its rapid growth.
"We are gratified by the many investors who endorsed our business model, management, and approach to the used book, movie, and music market. However, we did not find attractive the prices offered by the public market," said Manley in announcing the withdrawal of the financing. The company does not expect to seek additional financing.
The company filed for its IPO on March 3, 2004 with investment bank WR Hambrecht + Co using the firm's "OpenIPO" process. This approach relies upon an auction among interested investors to set the opening price and allocate shares of a company's stock. According to Manley, "an auction with a large number of informed bidders can be a great way for a company to discover market prices and a fair way to allocate shares in an IPO. This process can work, if well executed by investment banking professionals. An auction that attracts fewer bidders is less likely to result in an attractive price. I have no doubt that future IPOs, especially larger ones, will rely on auctions." Alibris offers more than 40 million used, new and hard-to-find books to consumers, libraries and retailers.
http://www.alibris.com
