IPOs/Recent Issues – EMACHINES –

Irvine, Calif.

Went public 3/24/2000 at $9 apiece

Filing Range:20 mil. shares @ $8 to $10

Shares Outstanding:144.69 mil. shares

Underwriters:Credit Suisse First Boston

BancBoston Robertson Stephens/Hambrecht & Quist/Salomon Smith Barney


(Data in $ millions)


12/981 2/99

Total Revenue $58.28 $814

Net Loss -2.8 -5.7

The Company:

Founded in September 1998, eMachines provides low-price, high-quality branded personal computers. Since its first sale in November 1998 when the company introduced its eTower PCs, it has sold over one million PCs. According to Ziff Davis Market Intelligence, the company sold the third highest number of PCs through retailers in the United States in June 1999. eMachines also offers an integrated computing and Internet access solution, currently through its relationship with America Online, and plans to launch e-machines.net, its private label Internet access service, in the fourth quarter of 1999. As part of the company’s solution, its PC buyers may receive rebates in connection with long-term Internet access service subscriptions, or ISP rebates. These ISP rebates enable consumers to purchase the company’s PCs for a net effective price of as low as $0 and to gain access to the Internet for a monthly fee. The company’s model allows it cost-effectively to offer its PCs and integrated computing and Internet access solution for the following reasons: it is able to maintain low fixed costs, capital expenditures and manufacturing and operating costs by outsourcing most of its major operating and manufacturing functions; it maintains low distribution, marketing and administration costs by distributing and advertising its products and services through a limited number of large retailers, including Best Buy, Circuit City, Office Depot and Staples; and it achieves high inventory turnover through product management and outsourcing of manufacturing.


Net proceeds will be used for general corporate purposes, including working capital and financing the company’s ISP rebate program.

Venture Backers:

TriGem Corp., Korea Data Systems America Inc., idealab! Holdings LLC, America Online Inc., Technology Crossover Ventures

Board Members:

Stephen Dukker

Hong Soon Lee

Michael Hong

Lap Shun Hui

Bill Gross

Jung Koh

Nathan Morton

C. Toms Newby