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Registration No. 333-77757
Filed pursuant to Rule 424(b)(3)
PROSPECTUS SUPPLEMENT NO. 2
(TO PROSPECTUS DATED AUGUST 6, 1999)
$172,915,000
CNET, INC.
5% CONVERTIBLE SUBORDINATED NOTES DUE 2006
AND SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION
OF THE NOTES
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This prospectus supplement supplements and amends the prospectus dated August
6, 1999, as supplemented and amended by that prospectus supplement No. 1 dated
September 30, 1999, relating to the notes and the common stock issuable upon
conversion of the notes.
o Maturity Date: The notes are due on March 1, 2006.
o Interest: Interest on the notes is payable on March 1 and September 1 of
each year at the rate of 5% per year, commencing on September 1, 1999.
o Conversion into common stock: You may convert the notes in whole or in
part into shares of our common stock at a conversion price of $37.40625
per share, subject to adjustment.
o Redemption: We may redeem the notes on or after March 6, 2002.
o Mandatory offer to repurchase: If we sell all or substantially all of our
assets or experience other kinds of changes in control, we must offer to
repurchase the notes.
o Ranking: The notes are general, unsecured obligations, junior in right of
payment to all of our existing and future senior debt and all existing and
future indebtedness and other liabilities of our subsidiaries.
o Markets for our notes and our common stock: Our notes trade on the Portal
market. However, once the notes are sold under this prospectus, they will
no longer trade on the Portal market. Our common stock trades on the
Nasdaq National Market under the symbol "CNET". The last reported sales
price of our common stock on October 12, 1999, as reported by Nasdaq, was
$56.50 per share.
o Selling securityholders: The notes and common stock are being offered for
resale by the selling securityholders listed in this prospectus. We will
not receive any proceeds from these resales.
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THE PROSPECTUS, TOGETHER WITH THIS PROSPECTUS SUPPLEMENT NO. 2,
CONSTITUTES THE PROSPECTUS REQUIRED TO BE DELIVERED BY SECTION 5(b) OF THE
SECURITIES ACT OF 1933 WITH
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RESPECT TO OFFERS AND SALES OF THE NOTES AND SHARES OF COMMON STOCK ISSUABLE
UPON CONVERSION OF THE NOTES. ALL REFERENCES IN THE PROSPECTUS TO "THIS
PROSPECTUS" ARE HEREBY AMENDED TO READ "THIS PROSPECTUS (AS SUPPLEMENTED AND
AMENDED)".
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THIS INVESTMENT INVOLVES RISK. YOU SHOULD PURCHASE ONLY IF YOU CAN
AFFORD A COMPLETE LOSS OF YOUR INVESTMENT. SEE "RISK FACTORS" BEGINNING ON PAGE
6.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE
SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR
DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
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The date of this prospectus supplement is October 13, 1999.
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The prospectus is hereby amended to add the following information to
the end of the section of the prospectus entitled "Selling Securityholders":
The information in the following table is as of October 11, 1999 and
assumes that no selling securityholder beneficially owns any shares of our
common stock other than shares issuable pursuant to the conversion of the
notes. In addition, the information in the table assumes the conversion of all
notes owned by each selling securityholder at the conversion price of $37.40625
per share. This conversion price may be adjusted under some circumstances. As a
result, the number of shares issuable upon conversion of the notes may increase
or decrease. Under the terms of the indenture governing the notes, cash will be
paid instead of issuing fractional shares upon conversion. The selling
securityholders listed below provided us the information contained in the
following table with respect to themselves and the respective principal amount
of notes that may be sold by each of them under this prospectus. We have not
independently verified this information.
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT OF SHARES OF PERCENTAGE OF
NOTES BENEFICIALLY COMMON STOCK THAT COMMON STOCK
NAME OF SELLING OWNED THAT PERCENTAGE OF MAY BE OUTSTANDING
SECURITYHOLDER (1)(2) MAY BE SOLD NOTES OUTSTANDING SOLD (3) (4)(5)(6)
- --------------------------------- --------------------- ------------------- ----------------- -------------
<S> <C> <C> <C> <C>
GLG Global Convertible Fund........ $4,500,000 2.6 120,300
</TABLE>
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(1) Except as otherwise set forth in the footnotes to this table, none of
the selling securityholders has, or within the last three years has had,
any position, office or other material relationship with us or any of
our predecessors or affiliates.
(2) No holder may offer notes pursuant to this prospectus until such holder
is named as a selling securityholder in this prospectus or in a
supplement to this prospectus.
(3) This number is the shares of common stock into which the notes held by
the selling securityholders are convertible at the conversion rate. The
conversion rate and the number of shares of common stock issuable upon
conversion of the notes are subject to adjustment under particular
circumstances. See "Description of the Notes - Conversion." Accordingly,
the number of shares of common stock issuable upon conversion of the
notes may increase or decrease from time to time. Fractional shares will
not be issued upon conversion of the notes. Instead, cash will be paid
instead of any fractional shares.
(4) This number assumes: (a) that the full amount of notes held by the
selling securityholder are converted into common stock at the conversion
rate and (b) the offering of such shares by such selling securityholder
pursuant to the registration statement of which this prospectus forms a
part. The conversion rate and number of shares of common stock issuable
upon conversion of the notes are subject to adjustment under particular
circumstances. See "Description of the Notes - Conversion." Accordingly,
the number of shares of common stock issuable upon conversion of the
notes may increase or decrease from time to time. Fractional shares will
not be issued upon conversion of the notes. Instead, cash will be paid
instead of any fractional shares.
(5) As of October 11, 1999 there were 73,424,361 shares of our common stock
outstanding. In accordance with the rules of the SEC, the percentage of
common stock outstanding owned by each selling securityholder is
calculated as follows: (a) the numerator is the number of shares of
common stock held by that selling securityholder upon conversion of all
notes owned by that selling securityholder and (b) the denominator
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includes the number of shares of common stock outstanding and the number
of shares of common stock held by that selling securityholder upon
conversion of all notes owned by that selling securityholder.
(6) None of the securityholders contained in this table were the beneficial
owners of more than 1% of the total common stock outstanding as of
October 11, 1999.
The selling securityholders identified above may have sold,
transferred or otherwise disposed of, in transactions exempt from the
registration requirements of the Securities Act of 1933, all or a portion of
their notes since the date on which the information in the preceding table is
presented. Information concerning the selling securityholders may change from
time to time and any such changed information will be set forth in supplements
to this prospectus if and when necessary. Because the selling securityholders
may offer all or some of the notes they hold or shares of common stock issuable
upon conversion of the notes pursuant to the offering contemplated by this
prospectus, no estimate can be given as to the amount of the notes or shares of
common stock that will be held by the selling securityholders upon the
termination of this offering. See "Plan of Distribution."
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