Did you hear about the latest Internet IPO? No, it's not Google. It's eCOST.com, taking a ride on the Google coattails. The PC Mall (NASDAQ:MALL) subsidiary filed to go public yesterday.
What's this? A direct marketer with an established site like PC Mall spinning off one of its online appendages? Woo hoo! Let's party like it's 1999. It does have a bubblicious ring to it, but you can't blame PC Mall.
Last night, the company reported sales growth of 18% overall, while the top line for its eCOST.com site surged a full 60%. eCOST.com also produced sequential sales growth. Not impressed? Hey, we're talking about doing better in the March quarter than in the seasonally strong December quarter.
Still, it will be interesting to see what the market ultimately pegs as a fair value for eCOST.com. After all, while it's a fast grower, it produced just 14% of PC Mall's first-quarter revenues.
In fact, eCOST.com is cut in the mold of Hidden Gems pick Overstock.com (NASDAQ:OSTK) with its emphasis on bargain-priced merchandise and closeouts. Over the past few months, the site has started selling everything from video games and housewares to jewelry and DVDs.
So does Google's pending debut mean that we'll see a ton of dot-com upstarts rushing to go public? Let's hope not. Internet companies that have done so are showing mixed results. Former Motley Fool Stock Advisor recommendation Netflix (NASDAQ:NFLX) has fared well. Travel portal Orbitz (NASDAQ:ORBZ) is trading essentially where it was the day it went public. iPass (NASDAQ:IPAS) has seen its shares more than halved from last year's highs.
Fortunately, unlike in the go-go '90s, the companies going public today have established track records, proven business models, and in some cases, actual profits. Don't replace that lemonade stand with a tulip bulb nursery just yet. The companies that have made it this far have earned it.
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Longtime Fool contributor Rick Munarriz would file to go public if he only knew where that file was. He owns shares in Netflix but no other companies mentioned in this story.
