Zulily Shares Soar 50% on Takeover Bid

Share On Facebook
share on Linkedin

Zulily, inc. (NASDAQ:ZU) shares soared nearly 50% on the NASDAQ exchange today after a joint announcement today that it will be acquired by Liberty Interactive Corp. (NASDAQ:QVCA), the owner of the popular home shopping network, QVC, for a sum of $2.4 billion.


Zulily is an online retailer based in in the United States. The company markets men’s, women’s, and children’s apparel, accessories, and shoes; children’s merchandise, such as infant gear, sports equipment, toys, and books; and other merchandise comprising kitchen accessories, home décor, entertainment, electronics, pet accessories, and health and beauty products. The company targets mothers with a flash sales model via both desktop and mobile websites and apps.

It was just a few days ago, 08 August that Zulily released its Q2 and H2 operating results which disappointed with rising revenues offset by increasing operating expenses. The company suffered a disappointing 29.6% decline in quarterly pre-tax profit, down to $5.45 million from $7.75 million year-on-year. Half year pre-tax profit declined 76% year on year.

Zulily shares have declined nearly 70% in the past 12 months, closing on 14 August at $12.57. Its shares opened this morning at 18.63 and have remained in that vicinity the entire day. At 4:00 p.m. EDT shares were holding at 18.81. Nearly 41 million shares were traded today, far beyond that average of 2.0 million per day. The purchase offer is $18.75 per share. It is worth noting that the price, although a 49% premium on Zulily shares as of Friday, is nonetheless, less than the company’s IPO of $22.00 per share.

The pairing of the companies seems to be an excellent fit as, according to CEO Darrell Cavens, Zulily is an internet version of the QVC television model. Other aspects of Zulily’s services, however, have not found favor with its customers.

  • Flash sales means inconsistent pricing
  • Delivery times have consistently been as long as three weeks
  • The company has an absolute policy of no returns

Expect some changes to the current model. With Amazon, Zappo’s and others delivering within one to two days, the internet retailing model must meet the standard set by the leader or fade into oblivion. The Liberty/QVC acquisition should prevent the latter from actually happening.

This may be more of a salvation than an acquisition. The combined companies will have an annual revenue of close to $10 billion.

Image courtesy of sixninepixels at FreeDigitalPhotos.net

CLICK HERE TO REGISTER FOR FREE ON ADVFN, the world's leading stocks and shares information website, provides the private investor with all the latest high-tech trading tools and includes live price data streaming, stock quotes and the option to access 'Level 2' data on all of the world's key exchanges (LSE, NYSE, NASDAQ, Euronext etc).

This area of the ADVFN.com site is for independent financial commentary. These blogs are provided by independent authors via a common carrier platform and do not represent the opinions of ADVFN Plc. ADVFN Plc does not monitor, approve, endorse or exert editorial control over these articles and does not therefore accept responsibility for or make any warranties in connection with or recommend that you or any third party rely on such information. The information available at ADVFN.com is for your general information and use and is not intended to address your particular requirements. In particular, the information does not constitute any form of advice or recommendation by ADVFN.COM and is not intended to be relied upon by users in making (or refraining from making) any investment decisions. Authors may or may not have positions in stocks that they are discussing but it should be considered very likely that their opinions are aligned with their trading and that they hold positions in companies, forex, commodities and other instruments they discuss.

Leave A Reply

Do you want to write for our Newspaper? Get in touch: newspaper@advfn.com

By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions

P: V: D:20220816 00:32:05