The stock of online grocer Webvan (Nasdaq: WBVN) closed unchanged on Monday, but shares actually climbed as high as 31-3/8 on a volatile day of trading. More than 14.6 million shares changed hands as Webvan’s quiet period ended. Deutsche Banc Alex. Brown gave Webvan a strong buy rating with a $50 price target, while Donaldson Lufkin & Jenrette gave the stock a buy rating with a price target of $42. Webvan also made Goldman Sachs’ recommended list and got strong buy ratings from Robertson Stephens and Thomas Weisel Partners. All of the recommendations came from firms that were part of Webvan’s underwriting team.
Webvan announced Tuesday that it will begin building warehouses in Chicago, Seattle, Dallas and Washington. While this news may be encouraging, it also underscores the fact that Webvan is an early-stage company that only sells groceries in the San Francisco Bay Area right now. A $50 price target seems pretty lofty, considering that Webvan already is worth more than $8 billion.