As expected, the initial public offering of online pet supplies retailer Pets.com (Nasdaq: IPET) got a lukewarm response on Friday. Pets.com stock closed its first day of trading unchanged at $11 a share. While Pets.com does have some advantages like having Amazon.com as an investor, the online pet products market is extremely crowded. Pets.com’s competitors include PetsMart, Petopia, Petstore.com and PetPlanet.com. Consolidation in this space seems pretty much inevitable.
Pets.com could have a tough time in the future, because investors are increasingly disenchanted with business-to-consumer companies. What’s more, Pets.com is spending money fast, as evidenced by the Super Bowl commercials it ran. The Pets.com IPO raised $82.5 million, but that money might not last long. The company lost $42.4 million on just $5.2 million in sales during the fourth quarter of 1999.
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