If I were a betting man, I’d throw down my InfoInterActive options on the fact that Excite@Home will be a major flameout within the next couple of months.
AT&T doesn’t HAVE any more money to plunk into E@H, and since they’re in the process of saying Bye-bye to the Cable unit, there’s some question as to why they NEED @Home anymore.
The company’s too expensive to buy (plus the losses are SCARY), the individual service elements are each (at best) 2nd or 3rd place in the market, and they don’t have a single market leader among the whole lot.
Monday August 20 6:03 PM ET
Auditors Doubt ExciteAtHome Survival
By BRIAN BERGSTEIN, AP Business Writer
SAN JOSE, Calif. (AP) – High-speed Internet access provider ExciteAtHome, formed in one of the biggest mergers of the dot-com heyday, could be on the verge of joining the growing list of high-tech flameouts.
The Redwood City-based company updated its annual report to the Securities and Exchange Commission (news – web sites) on Monday to add a note from its auditors expressing “substantial doubt about the company’s ability to continue as a going concern.”
The report sent ExciteAtHome shares down 40 cents, or 46 percent, to 47 cents in trading on the Nasdaq Stock Market.
ExciteAtHome, which lost $7.44 billion in 2000 and $346.3 million in the most recent quarter, already had said it needed substantial funding to stay alive into next year. The company is controlled by AT&T Corp., which owns 23 percent of ExciteAtHome stock but has a 74 percent voting stake.
In June, ExciteAtHome helped avert a major cash crisis by selling $100 million worth of notes that can be converted into company stock.
That deal required ExciteAtHome shares to stay listed on a major stock exchange. However, ExciteAtHome has fallen below the Nasdaq Stock Market’s minimum requirements for net assets, stockholders’ equity and share price.
If the stock were to be delisted, ExciteAtHome would be forced to speed up its repayment of the notes, auditors Ernst & Young pointed out in the refiled annual report.
ExciteAtHome spokeswoman Alison Bowman said the company has not yet gotten a delisting notice from the Nasdaq.
ExciteAtHome said its stockholders have approved a reverse stock split that would increase its trading price above $3, the minimum for a company that does not meet Nasdaq’s minimum requirements for assets and shareholder equity. But there are no assurances the price would remain above $3.
To conserve cash, ExciteAtHome is cutting 200 jobs this month, plus another 90 at its MatchLogic subsidiary, an online marketing company. That follows at least 630 layoffs at ExciteAtHome earlier this year, and the SEC report said even more jobs could be cut in the current quarter. The company has 2,200 employees.
ExciteAtHome was born in 1999 out of the $6.7 billion merger of At Home Corp., a leading provider of fast Web access over cable TV lines, and Internet portal Excite Inc. – which just happened to be headquartered across the street from each other in Redwood City.
By linking Internet access and Internet content, the deal was supposed to make the company a strong competitor to America Online, now part of AOL Time Warner Inc.
But while the company’s cable-modem subscriber base has risen from 330,000 at the time of the merger to 3.7 million now, the network has required costly investments.
In June, cable TV providers Comcast Corp. and Cox Communications Inc. decided to end their deals to offer Internet access exclusively through ExciteAtHome.
And the Excite portal has suffered severely from the plunge in Internet advertising, a market not expected to recover this year.
ExciteAtHome executives have said since April they were looking for someone to buy its media properties, which in addition to Excite include the Blue Mountain greeting cards site and Webshots, a site devoted to online photos.