Subject:
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Re: Not looking good for eToys...
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Newsgroups:
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lugnet.market.shopping
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Date:
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Sat, 30 Dec 2000 23:23:52 GMT
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Viewed:
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313 times
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In lugnet.market.shopping, Larry Pieniazek writes:
> Trade press is reporting that eToys has said they are going to run out of
> cash sometime in March or so barring another funding round or a white
> knight. And with Amazon allying with TRU on the toy front, there's not too
> much hope of a ecommerce white knight I don't think. With monkey wards
> exiting retailing (as well as Bradlee's), I'm not sure a conventional
> retailer will appear to buy them either. Might... eToys built a fulfillment
> operation that someone might want. But I doubt it.
Actually I suspect that a conventional retailer or white knight could NOT
buy eToys.
Under Section 203 of the Delaware General Corporation Law they are forbidden
to engage in a business combination with an interested stockholder for a
period of 3 years following the date that that person became an interested
stockholder.
Now I am not a legal expert by a long shot but this section does apply to
eToys as stated in their form 8-K filing and seems to make it difficult for
a white knight or retailer to purchase or merge with them.
I posted this earlier but seems appropriate again... a clip from their SEC
filing in December states:
"WE HAVE A SIGNIFICANT AMOUNT OF DEBT AND MAY HAVE INSUFFICIENT CASH FLOW TO
SATISFY OUR DEBT SERVICE OBLIGATIONS. IN ADDITION, THE AMOUNT OF OUR DEBT COULD
IMPEDE OUR OPERATIONS AND FLEXIBILITY."
> The dot com bubble has burst. There is more woe to come. It's not just the
> marginal guys with no real business plan like mypersonalunderwearshopper.com
> who are going under, either.
I agree... but only to a certain extent. The recent significant failures
and the many more which are sure to follow simply highlight the fact that
good technology does not (necessarily) make good business. Personally I
suspect that the "click-and-mortar" companies with well-planned eCommerce
strategies will reap significant rewards.
>
> ++Lar
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Message has 1 Reply:
 | | Re: Not looking good for eToys...
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| (...) That's a hostile takeover defense and Delaware law is friendly to corporations so I doubt this would apply to a friendly (white knight) takeover... Consult your M&A guy if you're thinking of buying them, don't take MY advice... ++Lar (24 years ago, 31-Dec-00, to lugnet.market.shopping)
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Message is in Reply To:
| | Not looking good for eToys...
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| Trade press is reporting that eToys has said they are going to run out of cash sometime in March or so barring another funding round or a white knight. And with Amazon allying with TRU on the toy front, there's not too much hope of a ecommerce white (...) (24 years ago, 30-Dec-00, to lugnet.market.shopping) !
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