LV Internet company drops stock offering

David Strow

Wednesday, Aug. 25, 1999 | 11:29 a.m.

After four months of repeated delays, Internet travel reservations company Travelscape.com Inc. of Las Vegas has formally canceled its initial public offering -- but company officials say they'll try again in 2000.

On Monday, Travelscape.com asked the Securities and Exchange Commission to withdraw its S-1 form. The S-1 is the document that registers securities in preparation for an IPO. Travelscape.com had filed its S-1 in late April in preparation for an IPO company officials hoped would raise nearly $50 million.

Travelscape had withdrawn another registration statement earlier this month, but could have reinstated that form in just a matter of days. The withdrawal of the S-1 means it would take some time to re-register and go through the IPO preparation process again.

The previous form, called an 8-A, would have gone into effect automatically in early August, 60 days after it was filed. Since this would have required the company to begin filing the reports required of public companies, Travelscape.com temporarily shelved that application.

"This is more permanent in a sense that this was an affirmative act by the company to withdraw the S-1," said Kelly Boyd, the company's securities attorney.

Jeffrey Marquis, chief financial officer of Travelscape.com, vowed that the withdrawal doesn't mean the end of the company's IPO plans.

"We are delaying it to give Wall Street some proof of our marketing and business plan," Marquis said. "The company only really started operation (a national brand) at the beginning of this year. The results are very strong, and we think rather than trying to convince the market that the results will come in, it will be easier to show them."

He added that the "market was very crowded right now" with new offerings. In its withdrawal statement, Travelscape.com said it was withdrawing the IPO "due to general market conditions and a determination by the company that it would not be in the company's best interest to proceed at this time."

Marquis said the company is looking toward the beginning of next year to try going public again. Meanwhile, he said, Travelscape is looking to cash flow and private investors to help fund its ambitious marketing plan. In its IPO documents, Travelscape.com said it planned to spend $40 million on its Internet business over the next 12 months.

"The cash flows from our current operations are healthy enough that we'll be able to stay within our marketing plan," Marquis said.