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October 7, 1999

Webvan Delays IPO After Running Afoul of SEC

By CBR Staff Writer

Internet grocery vendor Webvan Group Inc will delay its initial public offering, which had been scheduled for this week, as a result of concerns at the Securities and Exchange Commission that the company has been talking up the sale too much. Lead underwriter Goldman Sachs confirmed the delay Thursday, noting the significant publicity surrounding Webvan’s offering. The investment bank said the SEC and the company have agreed to a cooling-off period although it declined to elaborate. San Francisco-based Webvan plans to offer 25 million shares at a price of $11 to $13 each, raising up to $325m to fund its expansion.

The Wall Street Journal reported that the SEC was concerned that Webvan officials had made themselves available to the press recently, even as the company is in the required quiet period ahead of the IPO. According to the Journal, which cited people familiar with the agency’s thinking, the SEC was also concerned that Webvan has been sharing detailed information about its financial results – which weren’t published in the prospectus for the stock sale – in its pre-IPO road-show presentations to institutional investors. The information in question is reported to be bullish, the Journal said, with the company allegedly booking nearly $3m a month in sales. The IPO could be delayed for at least a week or two, the Journal said, and the company will likely to file an amended registration statement making all the road-show data available.

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