Tuesday, May 27, 2008

Good Bye Red Envelope

I have to admit, I loved purchasing gifts from Red Envelope. Not only were they usually clever and fun gifts, but they were also moderately priced and very fun to give in their bright red boxes. Nonetheless, all good things must come to an end.
Bad news for San Francisco based ecommerce site Red Envelope, an “upmarket online retailer with the primary goal of making gift giving easy and fun”: it’s about done. The company’s market cap is just $2.95 million even though it has cash on hand of nearly $12.3 million. The stock is trading at $0.23/share - it was as high as $8.42 in the last year.

Red Envelope was founded in 1997 and went public in 2003. But a steady stream of losses has taken it’s toll. CFO William Gochnauer resigned earlier this month, and board member John Pound resigned on March 30.

In a SEC filing on March 31, the company announced their credit line with Wells Fargo was terminated, the final straw. They also said they would be unable to continue operations and were talking to buyers.

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