Newegg Files For $175 Mil IPO - Going All Hollywood On Us Now?
Popular electronics retailer Newegg filed for a $175 mil initial public offering today, becoming the 3rd internet darling in recent memory, after Zappos and Mint, to seek a cashout. Let's hope Newegg doesn't switch their business model from being entirely beholden to customers to being entirely beholden to shareholders. Otherwise, the customers' battle cry of "It's Newegg or nothing!" will be getting a tryout. [Reuters] (Thanks to GitEmSteveDave!) (Photo: Matt & The Camera)
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I have no idea how I should feel about this...on one hand, most of us agree that Zappos may improve or at least stay the same, but Mint will be forever damaged by its acquisition by Intuit. On the other hand, I don't blame NewEgg for wanting to move up.
They don't sell food? What are these "chips" I keep seeing for sale on their site?
Nice tip, GitEmSteveDave!
I still love Zappos, so hopefully Newegg sticks with what's been working for them.
Here's hoping they still stay customer-friendly. Just ordered a new laptop from them over the weekend. Ordered it from NewEgg not only due to the better prices, but alo knowing that they really care about customer satisfaction.
Don't ever change, NewEgg!
@wchamilton: That's a scary thought. That's one of the reasons I can't order from Xoxide anymore. Every time I go to check out on Xoxide's site they're all "Hey, how about some caffeine go along with that order, geek?"
Caff... bwa... SURE! SIGN ME UP! Like you needed to ask me twice.
If Newegg did that I'd be in more debt that I am right now. :|
(No, I have no willpower towards caffeine. Penguin Mints forever!)
I really hope this doesn't change Newegg. It's probably the best online retailer there is. I wish I could use it more often. I live in one of only three states in the country with a Newegg warehouse and I've got to pay tax and shipping on everything.
Does anyone know how to get in on an IPO?
I am excited about this and might look to get in on the initial offering.
@Chongo: Have and be willing to invest lot of money. Seriously. When they get closer to announcing a date, they'll publish what it will take for buy-in. Me thinks it will be a good six figures to buy-in...
NOOOoooooo. Not my Newegg. I love'em, but...I also used to love Amazon and they've gone downhill a lot in the past few years.
@Chongo: You're better off just buying the stock the first day of it trading rather than trying to get in on the IPO. Same with Dole, when that happens.
So, anyone recommend a newegg replacement? No public firm ever does as well as a private one.
Don't change Newegg! I can't quit you!
@grandzu: Ah, I thought an IPO WAS the trading of stock... So do you buy stocks with a newly traded company the same way you normally would? Or do you need to be invited to the first offerings?
Haven't shopped there in awhile (paying off debt), but maybe a strategy they might have is to pick up those old Circuit City sites as local customer service and repair/warranty locations. Also would be a nice place to sell refurb items. Anyway, love the 'egg, hope this doesn't ruin them.
@kylere: If their service starts to suffer, I'll switch to CDW. They have a range of products and pricing groups from student to enterprise, and they're based in Madison, WI where I live. I still prefer Newegg for every little thing though, and that won't change unless they do.
@Buckus: bah! why change a good thing? they're better off staying online-only. B&M only makes everything more expensive.
I've actually started doing most of my tech shopping elsewhere. In the past year or so, the prices have been slowly rising, and the speedy shipping that once kept me a loyal customer has begun to deteriorate. Often, I find I'm paying six dollars to ship a stick of ram from north jersey to south jersey, and it takes five days to make the trip thanks to DHL. I have an amazon prime account, and I generally find that I can get the same product for a lower price and with faster shipping from Amazon. I can only imagine things will get worse now that they've gone public.
i'm pretty happy with newegg & pretty sad to hear this news. but one thing that's ticked me off lately is their use of DHL for shipping. i'm 2-1/2 hours from one of their distribution warehouses - if they ship UPS, i usually get the item within 24 hours. if they ship it DHL, it takes 7+ days!
@Chongo: No, not exactly. An IPO presents a guarentee by investment bankers to the company that they can generate ceratin cash for shares of the company. The bankers offer the shares to select investors at a set price. On the day the company goes public, the IPO investors are then welcomed to sell (or buy more) to the public (with certain exceptions such as employees of the company). IPO investing is very risky, even if you wait for the day the shares go public. Pricing fluctuations can be quite extreme in the first few days.
@Chongo: Yeah, messing with IPOs is really for the big boys or people who *really* know what they're doing.
If you're absolutely convinced it'll be a great investment over a long period of time, just pick some up at market value on the first day of trading.
@Persistence: Umm...no...Berbee, A wholly owned subsidiary of CDW is based in Madison, WI. The parent company is not. I beleive it is based out of Vernon Hills, Ill
"Let's hope Newegg doesn't switch their business model from being entirely beholden to customers to being entirely beholden to shareholders."
These things are not mutually exclusive- if they switch their business model away from a customer focus they will most likely not be serving the interests of their shareholders.
...CDW?! You have got to be kidding me. Their prices are horrifically inflated compared to EVERYONE ELSE ON THE PLANET. I can't even begin to fathom how CDW stays in business.
On the original topic though, I effectively stopped using Newegg a few years ago, after having spent upwards of $20k a year with them.
Most of my stuff I get from www.ewiz.com now. There's some other good ones out there, but eWiz gets the bulk of my business.
I used to spend $20k or more a year with Newegg...and then stopped a few years ago when they changed some of their return policies on things like motherboards and LCD monitors.
On occasion I still order stuff from them, but I have seen the profit-at-the-expense-of-the-customer stuff coming for a long time. Wouldn't bother me a bit at this point if they shriveled up and blew away...there's plenty of other companies on the net that are as good as Newegg once was.
Whelp, there goes the neighborhood.
From what I've seen, you find better deals on Newegg though...for instance, a 28" monitor I've had my eye on is $350 on amazon, rain sleet or shine...it has come down to $289 a few times on Newegg.
This will not end well. If it ain't broke, don't fix it.
At least there is still ZipZoomFly!
I wonder if anyone's ever tried this:
Step 1: Create a successful business with a great business model
Step 2: Go public with the company, and sell all your shares.
Step 3: Use the profits from #2 to start a new company that does the exact same thing as your old company, so that when Corporate America inevitably screws up and alienates their customer base by abandoning the business model that made it such a success in the first place, you'll be in a position to reap the benefits and have a successful business again.
Wash, rinse, repeat.
R.I.P. Newegg
@Chongo: The way an IPO can be a great deal is to be among the insiders with stock (Friends & Family) or employees who have stock that costs little to nothing and then sell it after the IPO for big money. Back in the days of dotcom madness, landlords would take pre-IPO shares in exchange for rent and hope to cash out on Day 1 of the IPO. There are ways to get in on the IPO through a brokerage firm, but you'll be paying the issue price, rather than getting it really cheap like the insiders would.
@kylere: Last time I did a build I got half my parts from NewEgg, and half from mwave.com
mwave seems to be pretty price competitive with newegg, and has decent service.
However, for displays and whatnot, I like to go with www.bhphotovideo.com
Of course things will change! You already know (or should know) that the most important thing to corporations is the satisfaction of shareholders.
It's the shareholders that decide who goes and who stays in the top paying jobs of the corporation. These jobs are generally that of the president, CEO, CIO, etc. And, since they make the policies that please the shareholders in order to keep their cushy jobs, guess who gets the shaft?
It was a good ride while it lasted. Now it's over.
Don't be too down on the NewEgg people that seem to be "selling out" though....you'd do it too for the millions that they stand to get.
@senatormayer: I don't make my electronic purchases anywhere else and I only buy my flash drives there. I truly do hope Newegg doesn't change either. That would be a shame and I'd more than likely have to find another retailer I trust. Those are hard to come by.
I remember when NewEgg's UI was just a bunch of blue links...
@Saboth: Ah, but when you factor in no sales tax, and free shipping from Amazon, the prices are about even. I'm not going to say Newegg doesn't win out sometimes, but as time goes on, I find Amazon to be the better choice more and more often.
Reading the comments, you guys make it seem like all publicly-traded companies are evil.
@Saboth: I haven't seen Amazon go downhill in the customer service department at least at all and I have been shopping with them for years. I would much rather shop with them than any B&M store. The only thing is you have to be careful with buying from their site because there are lots of "third party" sellers out there that will gouge you for all you are worth.
@What The Geek: It all depends on the product you are buying, to get the best price as always you must shop and look at multiple sources.
Wow, I hope this doesn't change Newegg. I've told co-workers that if Newegg started selling groceries I'd never have to leave my house but to go to work.