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PlanetRx up on financing
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July 25, 2000: 12:44 p.m. ET
Online pharmacy's ailing stock rises on news of equity financing deal
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NEW YORK (CNNfn) - The ailing online pharmacy PlanetRx.com secured a deal for up to $50 million in equity financing from a private investment fund Tuesday, news that sent its beleaguered stock up more than 100 percent.
The South San Francisco, Calif.-based dispenser of prescription drugs and personal care items over the Internet will receive equity investments from Alpha Venture Capital Inc. The equity financing will be calculated according to a formula based on the trading volume and price of the company's common stock.
In afternoon trading, PlanetRx (PLRX: Research, Estimates) stock gained 1-1/32 to 1-15/16. The company's shares have plummeted from a 52-week high of 36-1/2 to below 1 per share.
 Under the deal, PlanetRx will issue its common shares at a discount of up to 9 percent to Alpha Venture Capital, a $750 million private equity fund. The company will issue stock warrants to Alpha Venture priced at a 20 percent premium above the average market price of the common stock.
The deal will run for one year, with an automatic extension of another year if at least 20 percent, or $10 million, is drawn down in the first year. PlanetRx plans to use the proceeds to fund working capital and other general corporate needs.
PlanetRx has been hit hard by the downturn in Internet stocks and the struggles of online health companies in particular. In June, the firm cut its work force by about 15 percent and said second-quarter results would be lower than projected because of disappointing revenues.
The company is expected to report quarterly results after the close of regular trading Tuesday. 
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PlanetRx
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