CMGI Seeks To Reassure Investors
By: Beth Healy
10/9/00 11:30:00 AM
Source: The Boston Globe
Just ahead of a highly anticipated New York investor meeting to take place this week, troubled CMGI Inc. sought Friday to reassure investors that it has plenty of cash and that its top executives believe the company's stock will eventually rebound.
In an unusual announcement, the Andover, Mass., company declared that it has enough cash to last two years, with $654.2 million in the bank and $1.6 billion in securities, mainly stocks.
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Separately, CMGI said its chief executive, David Wetherell, had purchased 250,000 shares of the company's common stock on the open market. At roughly $21 a share, the purchase was worth nearly $5.3 million. Wetherell's total CMGI stock holdings exceed $600 million. At the stock's peak, Wetherell's personal holdings in CMGI were worth about $5 billion.
Wetherell said he had ``great confidence in CMGI's future,'' citing the company's recent reorganization into six business lines and its ``accelerating path to profitability.''
CMGI shares fell 69 cents Friday, to $20.81. Shares slid 25.5 percent in a week that savaged technology stocks. In 2000, the stock has plummeted 85 percent.
The company also pointed out that its chief financial officer, Andrew Hajducky, recently exercised options to buy 120,000 shares of CMGI, which he planned to hold, rather than sell.
The announcements came on the heels of news that CMGI had decided to shut down the East Coast operation of MyWay.com, a personalized portal company that employs 130 people in Andover. The West Coast office of the Web firm, formerly called Planet Direct, will remain open.
CMGI said it made the cash announcement to clarify contradictory reports from news outlets and Wall Street analysts about the health of its balance sheet.
Thomson Financial's First Call said there were no analyst reports released on the CMGI news Friday. Analysts who follow the company say CMGI must prove that its newly fashioned strategy works. The company is focusing on turning profits in its largest majority-owned businesses, which include search engine AltaVista, Web site builder CMGI Solutions, and targeted advertising player Engage.
The Internet company operator and investor lost $633.7 million in its fourth quarter ended July 31. It is spending cash at a rate of $63 million a month to run its 16 operating companies. CMGI said it plans to trim its cash use over the next six months, as it cuts costs and merges some of its divisions. Scores of jobs have been cut in recent months.
Through its venture capital arm, (at)Ventures, CMGI plans to make $10 million of investments a month, down from $25 million.
(The Boston Globe web site is at www.globe.com)
c.2000 The Boston Globe
By: Beth Healy
10/9/00 11:30:00 AM
Source: The Boston Globe
Just ahead of a highly anticipated New York investor meeting to take place this week, troubled CMGI Inc. sought Friday to reassure investors that it has plenty of cash and that its top executives believe the company's stock will eventually rebound.
In an unusual announcement, the Andover, Mass., company declared that it has enough cash to last two years, with $654.2 million in the bank and $1.6 billion in securities, mainly stocks.
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CMGI 22.94 2.13
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Separately, CMGI said its chief executive, David Wetherell, had purchased 250,000 shares of the company's common stock on the open market. At roughly $21 a share, the purchase was worth nearly $5.3 million. Wetherell's total CMGI stock holdings exceed $600 million. At the stock's peak, Wetherell's personal holdings in CMGI were worth about $5 billion.
Wetherell said he had ``great confidence in CMGI's future,'' citing the company's recent reorganization into six business lines and its ``accelerating path to profitability.''
CMGI shares fell 69 cents Friday, to $20.81. Shares slid 25.5 percent in a week that savaged technology stocks. In 2000, the stock has plummeted 85 percent.
The company also pointed out that its chief financial officer, Andrew Hajducky, recently exercised options to buy 120,000 shares of CMGI, which he planned to hold, rather than sell.
The announcements came on the heels of news that CMGI had decided to shut down the East Coast operation of MyWay.com, a personalized portal company that employs 130 people in Andover. The West Coast office of the Web firm, formerly called Planet Direct, will remain open.
CMGI said it made the cash announcement to clarify contradictory reports from news outlets and Wall Street analysts about the health of its balance sheet.
Thomson Financial's First Call said there were no analyst reports released on the CMGI news Friday. Analysts who follow the company say CMGI must prove that its newly fashioned strategy works. The company is focusing on turning profits in its largest majority-owned businesses, which include search engine AltaVista, Web site builder CMGI Solutions, and targeted advertising player Engage.
The Internet company operator and investor lost $633.7 million in its fourth quarter ended July 31. It is spending cash at a rate of $63 million a month to run its 16 operating companies. CMGI said it plans to trim its cash use over the next six months, as it cuts costs and merges some of its divisions. Scores of jobs have been cut in recent months.
Through its venture capital arm, (at)Ventures, CMGI plans to make $10 million of investments a month, down from $25 million.
(The Boston Globe web site is at www.globe.com)
c.2000 The Boston Globe
