Peapod Calls Friday's 22% Selloff an Overreaction to Its 10Q Report
Peapod (PPOD) attempted Monday morning to stanch reports that the company is running out of cash. Concerns about Peapod's financial position sent the company's stock price plummeting 22% on Friday.
On Thursday, the Internet grocery service filed its quarterly 10Q report with the Securities and Exchange Commission, stating, "The company anticipates that existing cash and marketable securities may be insufficient to fund the company's operations and capital requirements for the next year and is currently evaluating financing opportunities."
But early Monday, Peapod announced it had in excess of $15 million in cash and marketable securities, "an amount it believes is sufficient to fund its operating needs into the third quarter of next year." At the same time, the company disclosed that it is in talks with potential investors to raise additional financing past 2000, with the investment bank Wasserstein Perella's assistance.
Company officials called Friday's selloff an "overreaction." "The company is currently evaluating a number of financing alternatives, which should position Peapod for a strong future," Bill Malloy, Peapod's new president and chief executive, said in a statement. "We are confident that additional financing will be obtained early next year."Despite the attempt at reassurance, Peapod's stock fell 8%, or 15/16, to 10 3/4, in Monday morning trading.
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