Online retailer Letsbuyit.com was staring into the abyss last night as crisis talks aimed at securing the company's long term future failed to arrive at any positive conclusion.
Executives from the UK based, Dutch-registered firm were locked in discussions with officials appointed by an Amsterdam court to see if additional funding could be found or whether the business should be wound up. Shares in Letsbuyit slumped almost 70% when they resumed trading yesterday after being suspended at the end of last week, and analysts warned that it was unlikely a buyer would come forward.
"I'd be very surprised if they find [a buyer]," said Heidi Fitzpatrick, an internet analyst at Lehman Brothers.
"You just have to look at the financials to see that it's a pretty hopeless case."
The company, which allows consumers to pool their buying power to purchase cheaper electrical goods, is reported to have just €18m (£11.4m) in cash left and needs about €80m to survive.
Marketing spend, staff costs and the expense of fulfiling orders are so great that the business model has become unviable, Ms Fitzpatrick added.
A spokesman for the company - best known for its television advertisements showing ants explaining the virtue of strength in numbers - insisted there are parties interested in providing funds but admitted that no quick deal is likely.
Traditional retailers seeking to boost their online presence such as German supermarket chain Metro and Argos owner Great Universal Stores have been touted as potential white knights.
Last week Letsbuyit.com applied for and won protection from creditors chasing debt repayments. It also said it would stop taking new orders.
Letsbuyit's financial history has been dogged by difficulties despite strong early growth and an innovative business model that won praise from many early converts.
It floated on Frankfurt's Neuer Markt at the third attempt in July, raising half the amount of cash it had been hoping for. The shares were eventually placed at €3.50 each and immediately surged to a high of €6.45.
Offices have been opened in 14 countries and a user base of 1.1m people built.
According to the company's website, some 447,421 prod ucts have been delivered to clients throughout Europe.
The shares have fallen steadily since the summer as tech stocks and consumer focused e-commerce firms in particular have lost favour. In August, the company said it would cut 20% of its workforce of 400.
Last night, after falling by as much as 70% during the day, the shares closed at 50c.
Sales in 2000 are thought to have been around €40m, and breakeven was forecast for the end of next year.
Doubts over long term funding have become a common cause of concern among online retailers after the collapse of high profile firms such as Boo.com and Clickmango.
Paradoxically Lastminute.com, the British e-tailer that has of late attracted some of the most negative publicity, is one of very few companies with enough cash in the bank to see it through to profitability.
