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Technology Stocks : divine interVentures, Inc. (DVIN) -- Ignore unavailable to you. Want to Upgrade?

To: Edwin S. Fujinaka who wrote (91)	5/21/2000 8:26:00 AM
From: Glenn Petersen	Respond to of 246

From this morning's Chicago Tribune, compliments of The May Report: Copyright 2000 Chicago Tribune Company Chicago Tribune May 20, 2000 Saturday, CHICAGOLAND FINAL EDITION SECTION: Business; Pg. 1; ZONE: N LENGTH: 689 words HEADLINE: NET CONGLOMERATE CUTS 29 STAFFERS; DIVINE INTERVENTURES DELAYS OFFICE MOVE BYLINE: By Rob Kaiser, Tribune Staff Writer. BODY: Divine Interventures Inc., the high-profile Internet firm started by Andrew "Flip" Filipowski, laid off 29 employees Friday, but a company spokesman denied a report that the firm was going through a major restructuring, including the removal of some top executives. Lisle-based Divine began operations in June 1999 and has rapidly grown to more than 750 employees by making significant investments in more than 50 firms, bringing them into what Divine calls its "family of companies." All the jobs that are being eliminated are in the "partner development area," which evaluates firms for potential investments, said Dave Onak, a spokesman. Onak declined to say why these specific positions were cut, but said the move is not an indication that Divine is scaling back its investment activity. "Like any good business, we continually reevaluate our operations and make sure we're operating the way we should given the current state of the market," Onak said. "Although it was a tough decision to make, we felt like it was the right one to ensure the long-term success of our firm." A lengthy article Friday in an on-line publication about Chicago-area technology companies (www.themayreport.com) reported that Divine was undergoing a "major reorganization." Onak said that report was false. "It's all wild rumors and speculation," Onak said. "This was the same guy that said we were going to be bought by CMGI," a report that turned out to be false. Onak did say the company's plan to move into its Goose Island headquarters by this summer has been delayed. He expects the move-in will occur by the end of this year. Filipowski started Divine soon after the $3.5 billion sale last year of Oakbrook Terrace-based Platinum Technology International Inc., of which he was chief executive. Filipowski made approximately $290 million from the sale, which at the time was the largest deal ever for a software company, and he personally invested $20 million in Divine. Divine has been put forth as an Internet conglomerate, taking large investments in on-line firms, helping them grow quickly and spinning them off to the public markets. Divine had planned to offer 50 million shares to the public at $6 to $8 per share, but the company scaled back the offering last month to 20 million shares. Onak said the public offering is going forward, but declined to comment on when it will occur, citing a quiet period related to the offering. The company has been waiting for the markets to warm up to technology-related IPOs. Two similar firms, CMGI (a Divine investor) and Internet Capital Group, have seen their stocks plunge 68 percent and 86 percent, respectively, from 52-week highs. During the past six months, Filipowski has made numerous speeches around the Chicago area, urging the city's business leaders to take notice of the Internet Age. These speeches--along with their message that old companies need to die and make room for fledgling firms--have helped establish Filipowski as the embodiment of Chicago's recent push to join localities on the East and West Coasts as a center of technological innovation. While Filipowski has been able to attract an impressive roster of investors to Divine, including Microsoft Corp., Dell Computer Corp. and CMGI Inc., some Chicago-area venture capitalists are skeptical that Divine could succeed given its original corporate structure. "He needs a bull market to pull this off without a major restructuring of what he's doing," said Len Batterson, chairman and chief executive of Chicago-based Batterson Venture Partners LLC, before news of the layoffs hit. "It's only in a bull market, in a roaring bull market, that these entities are competitive," Batterson said. "As the market starts to wobble, the nervousness increases." Divine has garnered more publicity that any other local Internet company, appearing in publications ranging from the New York Times to Red Herring magazine. Other Chicago-area technology officials have expressed concern that if Divine fails, it may contribute to the impression that the Midwest is not a good place to attempt high-tech ventures.

To: Edwin S. Fujinaka who wrote (91)	5/30/2000 9:42:00 AM
From: Glenn Petersen	Read Replies (1) \| Respond to of 246

From today's Chicago Tribune: DIVINE'S DECISION DRAWS CRITICISM ANALYST SAYS MARKET WON'T BE HOSPITABLE TO PLANNED JUNE IPO By Rob Kaiser Tribune Staff Writer May 30, 2000 The decision by Divine Interventures Inc. to reject the advice of its lead underwriter and try jumping into a rough market for initial public offerings is being met with critical reviews. Last Friday, Lisle-based Divine replaced lead underwriter Credit Suisse First Boston with investment banking firm Robertson Stephens. In an e-mail to Divine board members, Andrew "Flip" Filipowski, Divine's chief executive, acknowledged that a main reason was because CS First Boston wanted to further delay the firm's IPO, which was originally set for March. In contrast, Robertson Stephens is "enthusiastic in their belief that Divine is one of the few that has the ability to go public successfully in this market," Filipowski wrote. Divine plans to resubmit documents related to the public offering by Wednesday to the Securities and Exchange Commission, begin its road show to potential investors the week of June 12 and go public between June 22 and 29, according to the e-mail. Jeff Hirschkorn, senior marketing analyst with New York-based IPO.com, believes Divine is making a mistake by going forward, even though the company has the backing of some high-profile investors, including Microsoft Corp. and Dell Computer Corp. "In this market you can have George Bush behind it; it's not going to make a difference," Hirschkorn said. "It's just your model. . . . Only the best and seasoned companies will do well. A company like Divine is a very questionable model. If some of their investments go south, what happens to the company?" Hirschkorn said the split between Divine and CS First Boston is a clear sign the investment banker didn't have confidence that the public offering would fly. In his e-mail, Filipowski noted that several people working on the Divine account at CS First Boston had recently left the firm. CS First Boston wanted to hold the IPO until late summer or fall, he wrote. Officials with the investment banking firm couldn't be reached for comment during the holiday weekend. Hirschkorn believes Divine should pull its IPO, rebuild its business model and seek money from other investors, away from the technology-weary public markets. Divine, which takes significant investments in Internet companies and offers them a suite of legal, real estate and public relations services, has already started shifting and cutting back its ambitious plans. The company laid off 29 people earlier this month in its partner development unit, which evaluates future investments. Those cuts were made because the firm is scaling back its investments as a result of previous delays of the IPO, according to company insiders. During an interview Saturday, Filipowski said he expects Divine will have more layoffs and a "delay indefinitely" in the development of its planned headquarters at Goose Island if the company can't go forward with its public offering. "If we were to not raise any more money, there would be a lot more people we would let go," he said. The first phase of the Goose Island project, a $62.9 million, state-of-the-art development, was supposed to be completed by September, but Divine officials have pushed back that time frame. Divine also has been shifting how the firm presents itself to potential clients and investors. Originally, Divine planned to spin out each of its service companies, including those for public relations (Buzz Divine), strategic consulting (Experience Divine) and real estate (DotSpot Divine). Now, company officials talk about maintaining these independent firms but lumping together their services for customers and eventually for a public offering. Divine is also putting more emphasis on helping existing companies beef up their e-commerce operations, in addition to its focus on accelerating the growth of dot-com companies. Divine hopes to raise between $150 million and $200 million with its IPO, while concurrently receiving an additional $300 million from corporate backers. Len Batterson, chairman and chief executive of Chicago-based Batterson Venture Partners LLC, said he's surprised that Divine isn't holding back its IPO for a stronger market. "They may feel there's been so much publicity about the fact that they are going to do an IPO that not doing so would kind of harm their credibility," Batterson said.