AmericanGreetings.com Inc., an online card company that enables people to send birthday and thank you cards via the Internet, announced Friday that it has filed for a $60 million (US$) initial stock sale.
The Cleveland, Ohio-based e-commerce firm said it plans to use the money raised by the IPO for working capital, to pay royalties to its parent company and to help pay for future acquisitions.
AmericanGreetings.com didn’t disclose in its preliminary prospectus filed with the Security and Exchange Commission how many shares will be offered, nor the estimated price range for the stock. However, this information is expected to be outlined in subsequent filings. Merrill Lynch, CIBC World Markets and Volpe Brown Whelan will underwrite the offering, and the stock will be traded on the Nasdaq Stock Market under the symbol “AGCM.”
Offspring Of A Giant
American Greeting Corp., the No. 2 Greeting Card company in the U.S., launched AmericanGreetings.com to create a presence on the Internet. But it also created the company to challenge such online card sellers as Blue Mountain Arts, Amazon.com Inc., and Microsoft.
Initially in 1997, AmericanGreetings.com sold subscriptions through America Online that let a subscriber send an unlimited number of online greetings over a period of time — generally six months. Last November, the online card seller began selling subscriptions over its own Web site to compete.
The AOL Edge
Analysts say that having access to AOL’s 17 million plus subscribers has given AmericanGreetings.com an edge over its online competitors. Earlier this month, AmericanGreetings.com announced that it had expanded its existing relationship with AOL by signing a new five-and-one-half year, $100 million (US$) agreement, not just to provide its greeting products within AOL — but also to its subsidiaries including Digital City, Netscape Netcenter and CompuServe. Through the new agreement, AmericanGreetings.com will offer AOL’s members free greeting products along with a newly enhanced subscription service. The companies will share all advertising and transaction revenue from these cobranded sites.
About The Company
AmericanGreetings.com, a wholly owned subsidiary of American Greetings Corp., has more than 1 million images and lines of verse in its library. During its first half of 1999, it earned $245,000 on revenue of $9.2 million, compared with earnings of $215,000 on revenue of $4.1 million during the same period in 1998. The e-marketer said it had 4 million visitors and more than 32 million page views in June; it also had more than 400,000 subscribers as of the end of June.