Exodus bucks trend, again
Web hoster up 11%; TMP Worldwide up 6%
By Bambi Francisco, CBS.MarketWatch.com
Last Update: 10:46 AM ET Aug. 8, 2001
NEW YORK (CBS.MW) -- Net shares declined three out of the last four sessions, but Exodus bucked the trend yet again Wednesday, with advances in eight out of the last nine sessions on optimism the cash-seeking Web hosting company may secure some funds.
Exodus (EXDS: news, chart, profile) rose 21 cents, or 10 percent, to $2.27. The stock traded at 99 cents as recently as July 23.
Exodus executives are meeting with advisers to discuss ways to raise additional funding, according to an Exodus spokeswoman. The company would not disclose who its financial adviser is.
Exodus shares have been under pressure on concerns the company may not have enough cash to sustain itself until it breaks even. At this juncture, analysts expect Exodus to break even during the second half of 2002. Exodus said it will end the year with $200 million in cash, which analysts believe does not provide enough of a cushion.
The other unsubstantiated rumor is that Exodus would be acquired. Potential acquirers may think twice, though, given the slowdown in Web hosting and Exodus' massive debt. Additionally, Prudential Securities has noted in the past that a potential buyout would be complicated by Exodus' relationship with Global Crossing (GX: news, chart, profile). Global Crossing owns 108 million shares, or 20 percent, of Exodus through the acquisition of GlobalCenter.
Last week, Global Crossing said it may have to write down its investment in Exodus.
On Tuesday, shares of other telecom companies burdened with debt gained on optimism the companies were making progress in cleaning up their balance sheets. Metromedia Fiber Network (MFNX: news, chart, profile), a provider of fiber optic infrastructure and Internet connectivity, added 4 percent, after running up 7 percent Tuesday.
Online recruiting
TMP Worldwide (TMPW: news, chart, profile), known for its popular online recruiting service Monster.com, posted second-quarter earnings that beat Street expectations by 2 cents.
Shares rose 6 percent to $52.20. The economic slowdown has been relatively positive for Monster.com. "Employers still continue to hire to maintain infrastructure and they're seeking tools that are cost-effective," said David Rosa, TMP Worldwide global brand manager. For example, an employer can take out a 500-line, 4-inch classified ad in the Sunday New York Times for $2,100 or spend $300 for an equivalent ad on Monster.com that runs for two months, said Rosa. What's more, traffic is up as the unemployed keep tabs on the labor market, he said. See full story.
And the bottom is?
After the bell Tuesday, Cisco Systems (CSCO: news, chart, profile) met analyst expectations as it reported fiscal fourth-quarter net income of $7 million, or breakeven on a per-share basis. Shares fell 2 percent to $18.18, however, on concerns business is not improving. See full story.
"No one knows when capital spending will bottom out and turn up," CEO John Chambers said during a conference call following the company's quarterly results. "While we would like to say the bottom has been reached, we are not there yet."
According to Merrill Lynch, Cisco continues to face difficult business conditions. Moreover, "we believe that business could weaken in Europe and Asia."
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Bambi Francisco is Internet editor of CBS.MarketWatch.com, based in San Francisco. |
