PlanetRx.com said Thursday that its board of directors approved a plan to liquidate all of the e-tailer's assets, in an attempt to regain some cash for its shareholders.
Holders of PlanetRx stock will vote on the plan -- which marks the abandonment of previous intentions to enter the US$14 billion a year specialty drug market -- at a company meeting scheduled for June 12th.
The liquidation plan includes selling off all remaining assets, including a distribution center in Memphis, Tennessee. PlanetRx has already put several of its key domain name holdings up for sale.
Last Round?
"PlanetRx.com's Board of Directors has concluded that a plan of liquidation presents the best option to preserve remaining shareholder value," chairman and chief executive officer Michael Beindorff said, adding that the plan was agreed upon "after months of deliberations and evaluations."
The company hopes that the liquidation plan will enable PlanetRx to avoid bankruptcy. According to Beindorfff, the liquidation plan, which is being refined by its attorneys and accountants, is designed to sell off the assets in an "orderly and efficient manner."
Looking for Niche
In February, PlanetRx announced that it would get out of the health and beauty e-tail business as of March 12th, when it shuttered its online store and referred prescriptions and other customers to longtime competitor Drugstore.com.
At the time, PlanetRx also said it had entered into an agreement to acquire a small, unnamed company in the specialty drug field and intended to enter that market. PlanetRx said that the niche market for drugs used only by a small percentage of the population is worth $4 billion a year in the U.S.
Early Orbit
PlanetRx had one of the more dramatic stock price run-ups in 1999, peaking at $292 a share in October of that year. On Thursday, it closed at 27 cents, just above its 52-week low of 22 cents.
When it reported earnings for the fourth quarter last month, the Memphis, Tennessee firm said that it had less than $9 million in cash on hand, down from more than $116 million a year before, and had lost $10 million during the previous quarter.
PlanetRx also warned at the time that an upcoming audit would raise
questions "regarding the company's ability to continue as a going concern."
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