July 25, 2022 — AutoWeb, formerly known as Autobytel, announced this morning that a subsidiary of One Planet Group is acquiring it for $0.39 a share.
The transaction, valued at nearly $5.5 million, is expected to close in September this year. Payam Zamani, founder and CEO of One Planet, will replace Jared Rowe as CEO and President of AutoWeb once the transaction is completed.
One Planet Group is a hybrid tech firm running a suite of online and media businesses.
Despite being on track to generate nearly $80 million in revenue this year, AutoWeb was running out of money and options. Losses had nearly doubled to $4.3 million from the end of 2021 and non-restricted cash had fallen to $3.8 million. And the company had a $9.1 million debt due in March 2023.
The board decided to throw in the towel. During its first-quarter earnings call in May this year, AutoWeb executives announced the company was exploring strategic alternatives and that “without an infusion of capital or some other transaction, the company may not have the cash needed to continue operations.”
The share price is down 87% over the previous 12 months. But the share price has struggled since its IPO in March 1999. It hit nearly $200 a share in April that year, but dropped to under $10 by mid-2001. In 2015, it had jumped to more than $24 a share, but declined to under $5 a share soon after and never recovered.
During the earnings call, Rowe cited economic headwinds including growing interest rates, inflation, and the severe drop in car sales due to the chip shortage as reasons for company’s financial struggles.
A week after the earnings call, in a LinkedIn post, Zamani challenged AutoWeb’s board to meet with him to discuss a path forward for the company.
In his post, Zamani was less charitable about Autobytel/AutoWeb’s struggles through the years blaming greed and board incompetence.
“What happened with this company can be the subject of a very interesting book. How a combined value of over $2B was wasted,” he writes. “How this company, which was a true pioneer, was pushed down the wrong path by a few VCs with the wrong intentions, followed by some board members and leadership motivated by very little but personal gain or position. Few cared about the shareholders, employees, vendors, or customers. This is the story of greed combined with incompetence in our capitalist society.”
For Zamani, the acquisition is a return to his roots from 28 years ago when he co-founded the original AutoWeb. He took it public in 1999 in a $938 million IPO, which at the time, was one of the most successful Internet IPOs in history. He left the company soon after the IPO but has stayed close to the automotive retail space.
There is no word yet on what Zamani plans for AutoWeb, but it is likely the brand will continue under the new ownership.
Below is a timeline of the AutoWeb/Autobytel history.
Autobytel/AutoWeb Timeline — Yes, It’s Confusing
1994 – Payam Zamani co-founds AutoWeb.
1995 – Pete Ellis launches Autobytel.
1999 (March) – AutoWeb goes public with a $938 million IPO.
1999 (March) – Autobytel goes public with a $103 million IPO (Zamani exits the company soon after).
2001 (April) – Autobytel acquires AutoWeb in a stock-swap deal valued at $15.6 million ($0.53 a share). Both companies were struggling as the Internet bubble popped. Their share prices had dropped to below $10 – with the heady days of their much-hyped IPOs receding into the distance.
2013 (September) – Autobytel invests $2.5 million into a Florida-based startup providing pay-per-click auction-driven automotive advertising marketplace services. Autobytel sells the AutoWeb domain and trademarks to the new company. Autobytel’s stake in AutoWeb is 15%.
2015 (October) – Autobytel acquires AutoWeb in all stock transaction. A few days later, Autobytel announces it is changing its name to AutoWeb.
2022 (May) – AutoWeb announces in its first-quarter earnings call that it is running out of money and had retained investment bank Houlihan Lokey to explore strategic initiatives.
2022 (July) – AutoWeb announces it has agreed to be acquired by One Planet Group.