The shutdown of WebHouse Club Perfect YardSale does not affect Priceline and its range of airline seats, hotel rooms and rental cars. WebHouse said its cash reserves of approximately $50 million, as well as $20 million of additional working capital, will be "more than sufficient" to satisfy all obligations to customers, employees and suppliers.
In a release, Priceline, which has seen its stock plummet to the range of single digits per share in recent months, far from a 52-week high of $104.25, said it will review its operations in the fourth quarter to remove the costs associated with providing services to WebHouse and Perfect YardSale. Priceline will also stop receiving royalties from the two licenses, which totaled $361,000 in the second quarter of this year.
"In light of the weakness of the current capital market environment, the WebHouse Club executive team has reluctantly concluded that it was unlikely to be able to raise the additional capital the WebHouse Club would need next year to achieve the necessary scale and our goals of profitability," Jay S. Walker, WebHouse Club founder, said in a statement. Mr. Walker is also vice chairman and founder of Priceline. "We have determined that the prudent course of action is to wind down our operations.''
Copyright October 2000, Crain Communications Inc.