CMGI to Sell Shares in AltaVista to Public in
April (Update2)
3/9/00 3:22:00 PM
Source: Bloomberg News
(Adds details on AltaVista.)
Andover, Massachusetts, March 9 (Bloomberg) -- CMGI Inc., an Internet
venture fund company, said it plans to sell shares in Web search service
AltaVista Co. in early April.
CMGI had first planned to take AltaVista, which it bought from Compaq
Computer Corp. last year, public in January. The initial public offering was
pushed back because of an administrative delay with the Securities and
Exchange Commission, CMGI Chairman David Wetherell said on a
conference call. He didn't elaborate on the delays.
Many Web experts like AltaVista's
technology because they believe it
sweeps a larger swath of the Internet than
most search directories. Andover,
Massachusetts-based CMGI invests in
Internet- related companies through
several funds with the goal of taking them
public or selling them to investors at a
profit.
AltaVista would have an initial market
value of almost $3 billion under the
proposed terms of the IPO. The Palo Alto,
California-based company filed with the
SEC last month to sell 14.8 million shares
at $18 to $20 each.
AltaVista would have 148.4 million
common shares outstanding after the
stock sale, according to a registration
filed with the SEC. Multiplying this number times $20 -- the high end of
the estimated price per share -- would imply a market value of about
$2.97 billion.
The company estimated that the stock sale will raise $258.5 million after
expenses, assuming a share price of $19. AltaVista will use the money
to expand its sales and marketing efforts, provide working capital, and
meet general corporate purposes.
Underwriters for the stock sale will include Morgan Stanley Dean Witter;
Chase H&Q; Robertson Stephens; Prudential Volpe Technology; and Wit
SoundView. AltaVista will seek to have its shares trade on the Nasdaq
Stock Market under the symbol ALTA.
CMGI plans to take several more companies public this year, including
CMGI Solutions, a technology consulting firm, free Internet service
1stUp.com, NaviNet, eGroups Inc., Furniture.com and MyFamily.com,
Wetherell said.
2nd-Quarter Loss
Earlier today, CMGI reported a fiscal second-quarter loss as acquisition
and stock-based compensation costs surged, although the company's
revenue almost quadrupled.
CMGI said it lost $187.8 million, or 74 cents a share, for the quarter
ended Jan. 31 compared with a profit of $13 million, or 6 cents a share, in
the year-earlier period. Revenue rose to $153.5 million from $39 million.
The company has acquired several Internet companies during the last
year to boost its revenue from operating businesses. Still, costs surged
as it absorbed nine acquisitions during the quarter. The company offset
those costs by selling shares in its investments such as Yahoo! Inc., the
top Internet search service.
CMGI recorded a pre-tax gain of $159.7 million from selling shares of
Yahoo! Inc. stock, the largest gain during the quarter stemming from
selling shares in its investments.
CMGI shares rose 6 7/8 to 145 3/8 in Nasdaq trading. After the close,
shares rose as high as 150 on electronic networks.
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