As Others Rush to File, Newegg Withdraws IPO

With Internet IPOs once again in vogue, it would seem like an optimal time for a ten-year-old, profitable online retailer to pull the trigger on a public offering.

Instead, more than a year after its initial filing for a $175 million IPO, City of Industry, Calif.-based e-tailer Newegg disclosed it is withdrawing its planned offering. It attributed the decision not to market conditions but to strategic interests, stating in an email that: “We have elected to withdraw our registration statement as we continue to evaluate the full range of our various strategic options and objectives.”

The scuttled IPO would have been one of the larger e-commerce offerings in recent years. Newegg, best known for discount deals on electronics, reported sales of $2.3 billion and net income of $24.9 million in 2009 (the last year of earnings it publicly disclosed). The company says it has been profitable every year since launching its e-commerce platform in 2000 and was the second largest online-only retailer in the U.S., according to the 2009 Internet Retailer’s Top 500 Guide.

The company has also been growing its operations in China. The company’s Chinese retail business, which focuses on IT products, consumer electronics and household appliances, generated net sales of $31.3 million in 2008 and $135.8 million in 2009.

Newegg raised $20 million in 2005 from Insight Venture Partners, according to Thomson Reuters. Insight is listed in a securities filing as owning a 12.7% stake in the company.