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Here’s a great strategy:

Come up with an idea for a company that sells $1 bills for $0.80, raise a $209 Million from VCs, take the company public, sell your stock for a huge profit, resign from the company, watch the company die, and then buy the whole thing back for $23 Million.

How is this legal?


>From $3 Billion to $23 Million: Bought by Founder   

by Anna Dorfman

Online superstore (Nasdaq: BUYX) was a sinking ship the last six months, as its Chairman and CEO, CFO and several board members resigned, 150 staffers were laid off, and international offices in Canada and the U.K. were shuttered. This week, the company, which is currently facing a shareholder lawsuit for securities fraud and possible Nasdaq de-listing, got a reprieve from Founder Scott Blum.

Blum has stepped forward, through his company SB Acquisition, to acquire the Aliso Viejo-based operation for 17 cents per share–its closing price on Friday–or about $23 million in cash. This is a sad ending for an enterprise that raised $209 million through its initial public offering in Feb. 2000, when it had a market cap topping $3 billion. Its current market cap is $23.2 million.

As part of the buyout, Blum’s SB Acquisition will also provide the struggling firm with immediate relief to the tune of $9 million in interim financing, subject to certain conditions. The transaction is structured as a reverse merger.

Both SB Acquisition and’s boards have unanimously agreed to the merger, and the deal is expected to close before Nov. 30, 2001.’s stockholders still have to give their vote of approval.

The much hyped, which gained prominence by underpricing other e-tailers–so much so that it was reportedly losing money on every sale, saw its stock fall precipitously once the market collapsed, from $35.44 per share in 2000 to an all-time low of 15 cents per share this month. In the three months ended March 31, 2001, the company’s net revenues fell 40 percent to $124.6 million, while net loss rose 38 percent to $45.2 million.’s stock value was unchanged at 17 cents per share at today’s market close.