Webvan: Forget what we just said
Webvan last week agreed with the Securities and Exchange Commission for a cooling-off period because of articles where company officials were quoted talking about the company's outlook and pending IPO.
"The company has received and may continue to receive a high degree of media coverage," the company said in its amended registration statement filed with the SEC today. "Prospective investors should not rely on such third-party statements or any information not contained in this prospectus."
Webvan pointed to an Internet article published on Oct. 6 that discussed the company's upcoming IPO and made claims that company officials gave potential investors, who were participating in a conference call, information about the company's outlook beyond its registration statement with the SEC.
"While the factual statements about Webvan in the article are disclosed in this prospectus, the article presented these statements in isolation and did not disclose the related risks and uncertainties described in this prospectus," the company filing said.
Disclosure by companies about initial public offerings is drawing closer scrutiny by securities regulators, according to one SEC official.
In general, the SEC is looking for ways to make the information flow about IPOs "safe and sensible, but not in the way it's going to result in hype and potentially mislead investors," Richard Walker, SEC director of enforcement told Reuters last week.
He declined to comment specifically on the Webvan case.
Projected loss in 2001
The Internet article also referred to a projected net loss
of $302 million for the year 2001 that Webvan said today was
mentioned by a representative of Goldman Sachs & Co., the IPO's
underwriter, during the conference call with investors.
That figure was "based on a number of estimates and assumptions" and that data was not prepared to comply with SEC and other accounting standards, the company said in the filing.
"Projections are necessarily speculative in nature, and it can be expected that one or more of the estimates on which the projections were based will not materialize or will vary significantly from actual results," the filing said.
In fact, Webvan went as far as to say that it does not make projections and in the future does "not intend to make public financial projections," according to the filing.
Backing off
The company also appeared to back away from statements made
by chief executive officer George Shaheen in an interview with
Forbes magazine in the Oct. 18 edition where he spoke about
Webvan's business plans.
"These statements were not intended to be relied upon by potential investors in making an investment decision to purchase the common stock in this offering," today's filing said.
The company said investors should not rely on any other information beyond the prospectus to make possible investment decisions.
The SEC requires companies to file all material information about the company in the registration statement for potential investors to review.
Webvan and the SEC have not said how long the cooling-off period will last although lawyers familiar with the process said it will likely last more than a couple days and could last as long as six months.