TheGlobe.com becomes the latest dotcom loser as it looks for a buyer.
vnunet.com, 06 Aug 2001
Three years after internet community site TheGlobe.com set the record for the biggest first-day gain of any IPO, it has closed down half its business and said it is looking to sell the other half.
On Friday the company announced it was closing its community sites to concentrate on developing its games business, and was looking for a partner or a buyer for that operation.
It laid off 60 people (49 per cent) of its staff, as it blamed the continuing weakness in internet advertising for its woes.
Chief executive Chuck Peck said the company took the action to save money while it sought "synergistic business combination or asset sale opportunities for our games properties."
TheGlobe.com's share price had soared 606 per cent on its first day, going from the offer price of $9 to close at $67.
It had in fact traded as high as $93. On that day, the company that had annual revenues of less than $3m was valued by the market at nearly $850m.
The share price has gone only one way since then, and on Friday it was trading at 14 cents.
The shares traded on the OTC market in the US as TheGlobe.com was delisted from the Nasdaq in April. The company's market valuation now is less than $5m.
In its latest quarterly statement, it had a loss of $6.6m on revenues of $4.7m.
TheGlobe.com's Nasdaq record lasted 13 months until the IPO of VA Linux, which rose 697.5 per cent from $30 to $239.25 in December 1999.
As the new economy comes crashing down around our ears, with every man and his dog fearing the next wave of job cuts or dotcom bombs, one veteran of the industry has maintained a little humour.
The case for joining a dotcom is fast diminishing, with industry observers predicting that a shakeout in the online market will leave few major players.
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