Peapod Weighs Sale, Options After Two Setbacks
CHICAGO -- Online grocer Peapod Inc. questioned its ability to keep operating after losing its chief executive and a vital cash infusion of $120 million.</br></br>The suddenness and seriousness of those setbacks incited an enormous sell-off of Peapod stock, which fell $4.0938, or 52%, to $3.7188, as of 4 p.m. in Nasdaq Stock Market trading -- a 52-week low.</br></br>For many investors the implications extended beyond Peapod and other online grocers to the vast array of profitless e-commerce companies that are dependent on the faith and funds of venture capitalists.</br></br>"It is symptomatic of the New Economy where companies are able to go public with unproven business models when they are still losing money," said Barry Stouffer, senior analyst covering Internet grocers at J.C. Bradford & Co. of Nashville, Tenn.</br></br>The crisis prompted an immediate Peapod search for strategic alternatives including a sale of the company. Peapod said it has only $3 million in cash on hand to cover debts of an amount it wouldn't disclose.