LV Internet firm yanks IPO

David Strow

Tuesday, Aug. 10, 1999 | 11:49 a.m.

Amid an increasingly rocky market for Internet stocks, Travelscape.com Inc. of Las Vegas has withdrawn its initial public stock offering -- at least temporarily.

On Aug. 2, Travelscape.com sent a letter informing the Securities and Exchange Commission that it was withdrawing its 8-A registration statement, filed June 3. The document is required of any company planning an IPO.

"The company will refile an 8-A Registration Statement if it later desires to go forward with its initial public offering," the document said.

Travelscape.com, which sells discounted hotel rooms and airline tickets over the Internet, is trying to raise $49.9 million from the offering. About $40 million of that would be spent over the next 12 months on the company's Internet business.

Kelly Boyd, the Palo Alto, Calif., securities attorney who filed the withdrawal request, said the withdrawal doesn't mean Travelscape.com's IPO is canceled, and that the company could reinstate its registration statement "in a very short period of time." The company's primary registration statement, known as an S-1, remains on file.

"Nothing has changed," Boyd said. "The company has not yet decided what they want to do ... they're in a holding pattern. It's exactly where it was before."

However, a company press release issued today about an unrelated matter pointed out that Travelscape.com was "a privately held company."

Travelscape.com had initially planned to go public in June, but has delayed its offering numerous times because of unfavorable market conditions. Lead underwriter U.S. Piper Jaffray postponed the offering indefinitely in late July.

Travelscape.com had to withdraw the offering statement, Boyd said, because it would have automatically taken effect on Aug. 3, 60 days after it was filed. Travelscape.com's stock wouldn't have traded publicly, but the company would have been subject to all SEC reporting requirements, including the filing of quarterly and annual reports.

Travelscape.com is hardly the only Internet company experiencing difficulty with its IPO plans. A downdraft in Internet stocks is taking IPOs with it.

Thirty-five companies were planning to go public this week; 24 of them are Internet-related companies. Now, observers say it's likely that no more than 15 will actually go public this week. As of midday today, only three companies had gone public.

Those that do brave the market are hitting choppy waters -- Chicago-based Braun Consulting, an e-commerce firm that hoped to sell its shares for as much as $12, got just $7 per share this morning.

In an unrelated announcement, Travelscape.com announced today that it is initiating Travelscape Europe, its first international travel service.

The company said the service offers air and hotel packages in about 20 European cities and 150 hotels. Cities include London, Paris, Rome, Geneva, Berlin, Amsterdam and Brussels.

Virtually all of the company's $7.6 million in revenues over the first three months of this year came from the sale of Las Vegas hotel rooms.