The new entity now goes by Newegg Commerce Inc., and its shares began trading on the Nasdaq on May 20 under the symbol NEGG.
Beijing-based Hangzhou Lianluo Interactive Technology Co. Ltd. acquired a controlling interest in Lianluo in 2016. A year later its subsidiary Digital Grid acquired Newegg for $442 million.
Newegg board member Zhitao He has a controlling interest in both Digital Grid and Hangzhou, as well as a 61% stake in Newegg Commerce. Fred Chang, who founded Newegg in 2001, retained 36% of the company, according to documents filed with the Securities and Exchange Commission. As of end of trading May 25, Newegg had a market cap of $3.9 billion.
“Becoming a public company is a milestone 20-plus years in the making, made possible by the hard work of Newegg’s employees and the support of our many partners, investors and customers,” Newegg Chief Executive Anthony Chow said in a statement. “As we enter this new phase as a public company, we’re more energized than ever about what the future holds for our company.”
The shareholder prospectus filed by Newegg’s owner with the SEC shows the ecommerce retailer posted a net income of $30.4 million on $2.1 billion in net revenue last year. It anticipates a 7.1% increase in sales to $2.25 billion and a net income of about $26 million for 2021. In 2018 and 2019, the company posted net losses of $33.6 million and $17 million, on $2 billion and $1.5 billion in sales, respectively.
Newegg sources merchandise — mostly desktop computers, laptops and accessories — from more than 2,000 brands, including Asus, HP, Lenovo, Dell, Acer, Microsoft, Samsung, LG, Gigabyte and Westinghouse. It has about 36 million registered customers, of which 4.7 million have purchased at least one item from Newegg in the past 12 months.
The company also caters to 610,000 registered business clients, such as health care providers, educational institutions and government agencies, and various small and mid-sized businesses.
In addition to direct sales, the company has set up Newegg Marketplace, where third-party sellers offer their products to the company’s customers and pay commissions on their sales.
It also sells products under in-house label Rosewill that are primarily focused around categories where Newegg can compete at higher-than-average margins. Rosewill products are also sold at Walmart, and on Amazon and eBay.
Newegg ended 2020 with 1,789 full-time employees. Approximately 55% are in United States, 37% are in China, 7% are in Taiwan and 2% are in Canada.
The company operates eight fulfillment centers — seven warehouses in North America and one in China — covering more than 1.5 million square feet. The geographical placement of the warehouses enables the ecommerce retailer to reach 95% of the North American population in two business days.
Fulfillment for its vendors accounted for approximately 7.7% of direct sales in 2020.
Electronics Retailer Newegg Goes Public