BigHub.com halts financing as CEO resigns
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CEO resigns
By Bloomberg News
Special to CNET News.com
May 24, 1999, 1:05 p.m. PT
STAMFORD, Connecticut--BigHub.com said its new chief executive, Al DiGuido, has resigned, and that the Internet company's $20 million private placement has been suspended.
"The financing was contingent upon the new management team coming onboard," said spokesman Barry Rothman. He said DiGuido quit late last week, days after the operator of the iSleuth Internet search engine announced his appointment on Monday.
Chairman Frank Denny will act as chief executive while a CEO is sought, Rothman said. In a press release, Denny said, "We are actively engaged in discussions to secure additional capital."
Denny was named chairman when the company announced that DiGuido, former executive vice president of e-commerce at Ziff-Davis, and others had formed a new management team.
Three other Ziff-Davis executives who were to be part of the team also decided not to join BigHub.com, Rothman said. They are Thomas Jones, who was to have been director of sales; Carla McLeod, who was to have been marketing director; and Erik Weigel, who was to have been director of brand and business development.
Bighub.com shares fell 0.13 to 7.56 in midafternoon trading. They fell 40 percent last week as it was reported that BigHub.com was privately selling preferred shares convertible into common at 74 percent below the then-prevailing market price.
Proceeds were to be used for marketing, working capital, and general purposes. The company never publicly disclosed the stock sale, which would have more than doubled its outstanding shares from 4.3 million.
DiGuido said in an interview last week that his official start date at BigHub.com was to be June 1. The private placement's offering memorandum said he started last month.
The memorandum also said the new management team included Pat DeMicco, a director, and Ogden Forbes, a research consultant. It said the new team included 11 members in all.
Denny, DeMicco, and Forbes once worked for Shopping.com, an Internet retailer now under investigation by the Securities and Exchange Commission for stock manipulation. Shopping.com was bought by Compaq Computer in March for $220 million.
Robert McNulty, founder of Shopping.com, owns more than 5 percent of BigHub.com, the private placement memo said. McNulty isn't involved with BigHub.com's management, DeGuido said last week.
BigHub.com has never filed a financial statement with the Securities and Exchange Commission, although it said in January that it would become a reporting company after the completion of its 1998 audit in February. It trades on the OTC Bulletin Board, which has no listing requirements.
The company is moving its executive offices to Stamford, Connecticut, Rothman said. Currently, its only operational office belongs to its Webmaster in Ormand Beach, Florida, he said. BigHub.com also plans to become a fully reporting company, he said.
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