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5. NAVISITE INC. Web hosting firm eats 97% value loss 5/22/2001
It seems that all of the problems that crushed Internet stocks and dot-coms since March 2000 were magnified for NaviSite.
If there's such a thing as guilt by association in the new economy, NaviSite suffered from it. Not only does CMGI Inc. own most of NaviSite's stock - 76 percent of shares as of January - it and other CMGI affiliates also generated most of NaviSite's revenue.
So when CMGI and its portfolio companies started to sniffle, it was a good bet that NaviSite would catch a cold.
CMGI said it would shed businesses and cut spending to conserve cash, both hurting the bottom line at NaviSite. The fundamental problem facing CMGI and NaviSite was an instantaneous slowdown in Internet-based advertising revenue.
Now, it looks like it could be pneumonia. In March, NaviSite indefinitely postponed a presentation to securities analysts. It also said it had hired Wall Street bankers Goldman Sachs Group Inc. to advise it on ''strategic alternatives,'' including being acquired.
JEFFREY KRASNER
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