Auric, we should open a real turd ... thread:
Read about a nasty fuck here:
Wednesday November 22, 7:15 pm Eastern Time
TheStandard.com
Priceline Forecast Worse Than Expected
By Ronna Abramson
Just a few weeks after Priceline.com warned of disappointing fourth-quarter sales, two more developments are now certain to eat into the company's bottom line: a $3.3 million charge for a loan to the company's former CFO and another unspecified charge for Walker Digital legal expenses.
Priceline, based in Norwalk, Conn., disclosed Wednesday in a Securities and Exchange Commission filing that it will take a fourth-quarter charge for legal fees it believes Walker Digital will be unable to pay the company. Walker Digital, a privately held incubator started by Priceline founder and Vice-Chairman Jay Walker, lost a key round of financing last weekend and laid off 100 employees. The company, based in Stamford, Conn., had agreed to reimburse Priceline for a portion of legal expenses related to a suit filed last year by Marketel International, a California company charging that
Priceline stole its business model developed 10 years ago.
In another filing last week, Priceline said it will take a $3.3 million charge in connection with the departure of Heidi Miller, who resigned as the CFO earlier this month. In March, Priceline loaned Miller $3 million with a 6.8 percent annual interest rate, to be paid back in full to the company in 2005. Miller left Citigroup to join Priceline in February with a $300,000 salary, options to buy 2.5 million shares of stock and the opportunity to invest in Walker Digital. She left earlier this month, saying that she did not want to work at a company that was retrenching. On the same day that Priceline announced her resignation, the company also said it would lay off 87 employees.
Why the beleaguered company decided to forgive the loan remains unclear. Priceline spokesman Brian Ek declined to give an explanation, and Miller also declined to comment.
Her employment contract said the loan would only be forgiven if there was a change in company control, death, termination for disability, termination without cause, termination for good reason or at the end of the five years.
One thing is certain, though: The timing of the charges for Miller's loan, as well as the Walker Digital legal fees, is hardly ideal. Analysts as late as this summer had forecasted that the name-your-price Internet company would be operating in the black by the fourth quarter. But those hopes were dashed when Priceline warned earlier this month that fourth-quarter sales were expected to fall from the third quarter. Priceline executives declined to provide any forecasts for the fourth quarter or 2001, but analysts quickly reworked their numbers and downgraded the company's stocks.
Priceline shares were trading at $2.31 late Wednesday, unchanged from Tuesday and just a tiny fraction of a 52-week high of $104.25 in March. |
