NENG exceeds expectations and the stock still gets cut in half:
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Network Engines stock dives
By Ted Griffith, CBS.MarketWatch.com
Last Update: 6:24 PM ET Nov 9, 2000
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CANTON, Mass. (CBS.MW) -- Network Engines Inc. saw its market value cut in half Thursday after the company announced an acquisition and said it sees increased operating expenses.
The provider of Internet server appliances (NENG: news, msgs) said late Wednesday that it would acquire Austin, Texas-based IP Performance Inc. for about $6 million, or 450,000 shares of Network Engines' stock. That stock offer, however, was worth about $12 million when the deal was announced.
Shares lost $13.13, or 50.5 percent, to $12.88.
Investors may have been more concerned about Network Engines' reported fiscal year net loss of $20.6 million, or $1.99 a share, compared to a net loss of $6.1 million, or $1.83 a share, last fiscal year. Revenue grew to $43.1 million from $6 million in the previous year.
Looking ahead, Network Engines of Canton, Mass., said it expects license revenue to decline and operating expenses to rise as the company invests "aggressively" in its business.
On the acquisition, Network Engines said IP Performance's technology would allow Network Engines to deliver customers' Web content more rapidly and efficiently than with standard server technology. |
