In the "putting your money where your mouth is" category.........
Internet Capital Executives to Invest $10 Mln on Company Stock
Malvern, Pennsylvania, May 31 (Bloomberg) -- Internet Capital Group Inc. executives will
spend $10 million of their own money to buy shares of ICG to show they believe the
investor in online industrial commerce companies will overcome an 80 percent, five- month
stock slide.
Executives have already spent $20 million buying shares since last year, Chief Executive
Walter Buckley told more than 200 shareholders at the company's first annual meeting.
That's one reason Wayne, Pennsylvania-based ICG expects a June 15 expiration of sale
restrictions on about a third of its shares to be a ``non event,'' Buckley said.
``I wouldn't trade our position for anything, anywhere,'' Buckley said in concluding the
two-hour meeting at a Malvern, Pennsylvania, hotel. ``The challenges and obstacles we
face on our journey will pale in comparison to the rewards.''
ICG stock fell 1 1/2 to 28 1/4 in afternoon trading. The stock peaked at 212 in January, a
more than 30-fold rise from its August initial public offering price, and subsequently
swooned on investor concerns about competition from traditional industrial companies and
a long wait for profitability.
Buckley faced 10 shareholder questions from the floor and two of the sharpest came from
a retired couple from nearby Hatboro who first bought the stock at 40 last year, and then
bought more at 161 1/8 in January. Their paper losses total $300,00, said their son,
Charlton Merkin.
``The market and institutions are not taking you seriously,'' because the company has said it
doesn't know when it will be profitable, said Gerald Merkin. ``I own a few thousand
shares, and I'd like to know when you're going to show me the money.''
Creating Value
Chief Financial Officer David Gathman said ICG can only reflect full results of
majority-owned companies and pro-rated results of companies in which it owns a 20
percent to 50 percent stake.
``The financial statements themselves are never going to reflect the value we're creating,
and Wall Street doesn't even publish estimates,'' Gathman said. ``They measure our
progress using a `sum-of-the-parts' method.''
Buckley said ICG plans to launch a marketing program led by former General Motors
Corp. Oldsmobile brand manager Karen Francis to educate investors and the public.
Shareholders heard that ICG now owns an average 35 percent stake in 71 online
commerce companies, including 10 in Europe and one in Asia. The company plans to open
offices in Paris and Japan, and five of its companies plan European ventures in the next
two months.
Seven companies are public and seven others are in registration to go public, though that
process has been slowed by a sour market for new technology shares, said Ken Fox,
co-founder.
``ICG has moved in tandem with the market and has suffered more as our partner
companies have declined,'' Buckley said. ``That's also affected our ability to take
companies public. That too will change.''
The company now sees 2,000 business plans a month, 250 in Europe. Shareholders
overwhelmingly approved the election of directors, the appointment of KPMG LLP as
auditors and increases in authorized shares outstanding and shares available for employee
stock options.
May/31/2000 13:34 ET |
