uBid

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uBid Inc.
Type Public (OTC: ENAB)
Founded Chicago, Illinois, USA (1997)
Headquarters Itasca, Illinois, USA
Key people Jeff Hoffman, CEO
Industry Auctions
Products Online auction hosting, Consumer electronics, liquidations
Revenue ▼$84.592 million USD (2005), ▼$66.559 million USD (2006), ▼$43.061 million USD (2007), ▼$31.579 million USD (2008), ▼$15.514 million USD (2009 YTD 9-30-09)
Website www.ubid.com

uBid Inc., Symbol: ENAB, manages an online auction and shopping website that offers both goods sold directly by the company and items sold by pre-approved uBid Certified Merchants. It is only available to US residents.[citation needed]

Contents

[edit] Overview

uBid, a division of Enable Holdings Inc., was founded in 1997 and is headquartered in Itasca, Illinois[1]. uBid restructured itself into Enable Holdings starting in the first quarter 2008, and presently characterizes itself as a seller solutions company that offers excess inventory at discounted prices[2]. The site offers both products sold through uBid and products offered by other established businesses through the uBid Certified Merchant Program. The site specializes in new, refurbished and overstock consumer electronics such as computers and cellular phones, but has recently expanded to offer other services such as travel packages and jewelry.

[edit] History

The company has been acquired and divested multiple times.

CMGI acquired the company from its founders in 2000 for $407 million.[3] The company is still memorialized at the home of the New England Patriots, formerly CMGI Field, now Gillette Stadium, with the "uBid.com Entrance."[4]

In 2003, CMGI sold uBid to Takumi Interactive, a holding company formed to manage its purchase by Thomas Petters and the Petters Group of Minnetonka, Minnesota.[5] Before this acquisition Ubid had a rather good reputation but almost immediately went down under Petters Group control due to multiple customer service and product issues (citation needed). In Petters' recent criminal trial on numerous Federal charges, Petters testified that uBid was profitable,[6] while this does not correspond to the real data on Profitability shown below.

After Mr. Petters' arrest, uBid laid off a large portion of its workforce in an effort to contain costs. Management announced 12 layoffs, but the truth was 31% of its workforce or between 22-28 employees.[7]

Subsequently, On December 2, 2008, the company received financing from Robert T. Geras, on terms that essentially gave Mr. Geras and his wife warrants for a controlling interest, in exchange for a loan of approximately $1.5 million.[8] In 2009, Mr. Geras resigned his position on the company's board of directors.

[edit] uBid Certified Merchant Program

In order to maintain a trusted trading environment, uBid only allows established businesses who have been pre-approved to sell products on its site. Merchants wishing to be approved must provide tax and credit information as well as trade and bank references to prove their credibility. Once approved, Certified Merchants are allowed to sell their products on the site, however all payments and customer service inquiries are made directly through uBid in order to maintain consumer trust and provide the best possible post-sale service. Due to this system, Certified Merchants do not have any direct interaction with customers except for questions asked about products through the uBid site, nor do they see customers' credit card information.

[edit] Viability Issues

[edit] Profitability

For 2004, the company recorded revenues of $87.002 million and a total loss of $6.309 million.

For 2005, the company recorded revenues of $84.592 million and a total loss of $9.049 million.

For 2006, the company recorded revenues of $66.559 million and a total loss of $7.555 million.

For 2007, the company recorded revenues of $43.061 million and a total loss of $7.041 million.

For 2008, the company recorded revenues of $31.579 million and a total loss of $16.040 million.

(Above numbers taken from EDGAR copy of the company's 2009 annual report[9].)

For the nine months ended September 30, 2009, the company reported $15.514 million in revenues and a total net loss of $8.059 million[10].

[edit] Warning in November, 2009 Quarterly Report

"The Company is negotiating a financial restructuring with its secured and unsecured creditors which is being done at the same time the Company is attempting to secure further financing.  There is no assurance the Company will be successful with the financial restructuring. If the Company is not successful, substantial doubt exists as to its ability to continue as a going concern." [11]

[edit] Other Press

The company has closed its former offices in Chicago and moved into a subleased warehouse facility in Itasca, Illinois[12].

According to AuctionBytes, the company is not paying its third party sellers, for whom the company collects all revenues, in a timely manner[13].

[edit] Consumer Activism

Ubid holds an A+ rating with the BBB http://www.bbb.org/chicago/business-reviews/auctioneers/ubidcom-in-tilton-il-9002499 but has an extremely poor score at resellerratings http://www.resellerratings.com/store/UBid.

[edit] Notes

  1. ^ "About uBid – Overview". http://www.ubid.com/. Retrieved 2009-11-25. 
  2. ^ "Enable Holdings 2008 Annual Report, filed November 16, 2009". http://biz.yahoo.com/e/091116/enab.ob10-k_a.html. Retrieved 2009-11-25. 
  3. ^ "CMGI To Acquire uBid.com". http://www.encyclopedia.com/doc/1G1-59316870.html. Retrieved 2009-12-01. 
  4. ^ "Gillette Stadium". http://www.gillettestadium.com/stadium_information/index.cfm?ac=quick_facts. Retrieved 2009-12-01. 
  5. ^ "Takumi Interactive, Inc. Purchases uBid Business". http://www.ubid.com/about/Press_room/Press18.asp. Retrieved 2009-12-01. 
  6. ^ "Petters blames top associates for alleged fraud". http://www.google.com/hostednews/ap/article/ALeqM5gS62tzzY_3x-DLYX-79KKhZ0nB2wD9C2ADB84. Retrieved 2009-12-01. 
  7. ^ "Pink-Slip Monday for Ecommerce with uBid, eBay Layoffs". http://blog.auctionbytes.com/cgi-bin/blog/blog.pl?/pl/2008/10/1223698446.html. Retrieved 2009-12-01. 
  8. ^ "Enable Holdings, Form 3, 12-2-2008.". http://google.brand.edgar-online.com/DisplayFiling.aspx?TabIndex=2&FilingID=6279633&companyid=397723&ppu=%252fdefault.aspx%253fcompanyid%253d397723%2526amp%253bformtypeId%253d66. Retrieved 2009-12-01. 
  9. ^ "Enable Holdings 2008 Annual Report, filed November 16, 2009 (EDGAR)". http://yahoo.brand.edgar-online.com/displayfilinginfo.aspx?FilingID=6893578-108572-118761&type=sect&dcn=0001144204-09-059357. Retrieved 2009-11-25. 
  10. ^ "Enable Holdings 10-Q, filed November 20, 2009". http://biz.yahoo.com/e/091120/enab.ob10-q_a.html. Retrieved 2009-11-25. 
  11. ^ "Enable Holdings 10-Q, filed November 20, 2009". http://biz.yahoo.com/e/091120/enab.ob10-q_a.html. Retrieved 2009-11-25. 
  12. ^ "UGL Equis negotiates 48,000 sf sublease". http://www.rejournals.com/news/213165-ugl-equis-negotiates-48000-sf-sublease. Retrieved 2009-11-25. 
  13. ^ "uBid Sellers Worried over Enable Holdings' Financing". http://blog.auctionbytes.com/cgi-bin/blog/blog.pl?/comments/2009/11/1258753718.html#1259175932. Retrieved 2009-11-25. 

http://www.consumeraffairs.com/online/ubid.html.

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