Copyright 1999 Daily News, L.P.
Daily News (New
York)
July 29, 1999, Thursday
SECTION: Business; Pg. 34
LENGTH: 360 words
HEADLINE:
DRUGSTORE.COM DAZZLING DEBUT JUST THE RIGHT RX FOR INVESTORS
BYLINE: BY STAFF AND WIRE REPORTS
BODY:
The first day of trading for
Internet pharmacy drugstore.com was just what the doctor
ordered: a surge in its price and evidence that dot-com hysteria is still
strong.
The stock, initially priced at $ 18 a share, soared as high as $
70 yesterday shortly after opening and ended the day up 179%, or 32 1/4, at $
50.25.
The company raised $ 90 million in its offering of five million
shares. Analysts had expected a strong debut from the company, mostly because of
the drug and online heavyweights associated with it Amazon.com is the company's
largest stockholder.
"It's great to have [Amazon.com CEO] Jeff Bezos
buying shares. It's a huge advantage in building consumer awareness," said Evie
Black Dykema, an analyst at Forrester Research.
Billionaire Paul Allen's
Vulcan Ventures and venture capitalists Kleiner Perkins Caulfield & Byers
also have stakes in drugstore.com.
The online retailer sells health and
beauty products and prescription drugs. It also sends E-mail refill reminders
and offers detailed information about drugs and health issues.
The
company's agreements with drugstore giant Rite Aid and vitamin retailer General
Nutrition were also seen as strong positives, some Wall Street analysts said,
because they give drugstore.com an increased presence and more credibility.
Most importantly, analysts added, they give it access to pharmacy
benefit coverage provided by insurance firms and pharmacy benefit management
firms.
But not everyone was convinced.
"It's due to the silly
hysteria going on" in online health care, said Vincent Slavin, an analyst at
Cantor Fitzgerald. "It's the same old movie, with the same old ending: it will
be lower [rather] than higher. I'm not a believer," he added.
Although
investors have showed obvious interest, analysts said companies selling
pharmaceuticals online will face hefty competition and will have to work out
issues like insurance coverage.
The company had sales of $ 4.2 million
for the six months ended July 4.
Notes: Graphic not available
electronically. GREAT OUT OF THE GATE Chart showing the opening day trading of
IPO drugstore.com. See graphics file.
LOAD-DATE: July
29, 1999 
