Monday, April 26, 2010
Loser Lulu cancels IPO
I previously told you that Canadian author-services company Lulu.com hoped to do an IPO (initial public offering), selling $50 million in stock to pay off debts. I pointed out that the company's sloppy printing, bad customer service, bad website, high prices and strong competitors were not indicators of future success with either the IPO or business in general.
Last week, Lulu's underwriters stated, “Due to current market conditions, at this time Lulu Ltd. has decided to postpone the financing until further notice.”
According to the Globe and Mail of Toronto, "The decision to pull this IPO shows investors are still leery of unproven small-cap companies. Lulu lost $1.9 million last year on sales of $32.6 million."
In contrast, vanity publishing behemoth Author Solutions had 2009 sales of about $100 million, and apparently made a profit. Author Solutions now owns such former competitors as Author House, Xlibris and Trafford. Don't be surprised if it gobbles up Lulu, too.