Here is another article on SI's parent Infospace. I don't think they will be disappearing in the near future.
Saturday, July 6, 2002
By JOHN COOK
SEATTLE POST-INTELLIGENCER REPORTER
InfoSpace Inc., a Bellevue Internet company whose founder once claimed it would be bigger than
Microsoft, may get kicked off the Nasdaq stock exchange for not meeting minimum listing
requirements.
InfoSpace received notification Wednesday that its stock did not meet the national market's
minimum bid price of $1. The stock, which during the Internet euphoria of 1999 and early 2000
traded for more than $100, first closed below a buck May 21. It closed yesterday at 51 cents, up a
nickel.
InfoSpace has three months to try to boost the share price above $1, something the company's
board of directors is now trying to achieve. Among the options the company is considering is a
reverse split and a stock buyback program.
"We feel pretty good that we have a number of options available," said company spokesman Steve
Stratz. "We will take the best step forward and go from there."
Founded by former Microsoft manager Naveen Jain in 1996, InfoSpace was one of the Seattle
area's most highly touted Internet companies. It went public in December 1998 at $15, rising only
$5 in its first day of trading. But the following year the stock took off, culminating at $130.53 on
March 2, 2000.
Never known for modesty, Jain frequently made bullish predictions about his company's future.
A month prior to the stock reaching its all-time high, Jain told Bloomberg News, "There's no
reason this won't be a trillion-dollar company." He then went on to say that InfoSpace would hit
that milestone quicker than it took Microsoft to reach half a trillion dollars.
But like many Internet companies, InfoSpace encountered difficult times in mid-2000. The stock
plummeted, some days falling by as much as $13. Then, a $2.7 billion stock deal to acquire
Go2Net Inc. in July 2000 led to massive losses.
Last year, InfoSpace lost highly regarded CEO Arun Sarin after just nine months on the job. It also
cut its staff by 450 in two rounds of layoffs. Lawsuits piled up, including several by former
employees who accused Jain of promising stock options and then changing the agreements. A
number of class-action lawsuits also were filed alleging that the company disseminated false and
misleading financial information.
In the first quarter, InfoSpace reported revenues of $33.1 million, a 28 percent drop over the same
period last year. It lost $237 million, primarily because of the adoption of new accounting
procedures.
Despite those numbers, Stratz said InfoSpace is well positioned with no debt and more than $200
million in cash and short-term investments. He also said that two of the company's three business
units were profitable on a pro forma basis in the first quarter.
"We still feel we are in a really good position, with the balance sheet and no debt ... and a lot of
blue-chip clients," Stratz said.
InfoSpace, which distributes content over the Internet and to wireless devices, is not the only
Seattle area high-tech company to receive a delisting notice from Nasdaq.
Others include Image X, Internap Network Services, Metawave Communications and Onvia.com.
In May, Onvia said it would try to conduct a 1-for-10 reverse stock split to get its share price above
$1. Shareholders will have a chance to vote on the proposal at Onvia's annual meeting next week.
Even though InfoSpace's fall from grace has been dramatic in the past two years, Stratz said the
delisting notification is not a shock.
"Where we are at right now, I don't think this is a big surprise," he said. "A lot of companies are
going through the same thing, trying to figure out the next steps." |
