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Market woes take toll on Internet Capital Group February 22, 2001 11:05 AM ET by Adam Feuerstein Internet Capital Group (ICGE), the business-to-business holding company, reported a fourth-quarter loss that grew dramatically as a result of charges taken to reduce the value of its portfolio companies. Wednesday after the bell ICG reported a fourth-quarter net loss of $561 million, or $1.97 per share, compared with a net loss of $263.9 million, or 94 cents per share, in the third quarter. ICG closed Wednesday at $3.44, down 19 cents, or 5 percent. The stock has traded as high as $156 in the past year. In late morning trading today, ICG was trading down about 3.6 percent, to $3.31. Shrinking portfolio The huge loss was attributable mainly to ICG`s decision to reduce the value of its portfolio by $302 million in the fourth quarter. The plunging stock market, exacerbated by the even weaker performance of b-to-b companies, has sharply reduced company valuations across the board. ICG, in particular, pegged billion-dollar market valuations on several of its partner companies. Today, those valuations, while not exactly known, are certainly worth far less. ICG executives are spinning a different set of numbers that they say better reflect its operating performance, and the operating performance of its partner companies. On a pro forma basis, which excludes the investment write-offs, ICG lost $200 million, or 70 cents per share, in the fourth quarter. This is the first time ICG has released these figures, so there are no historical comparisons available. Despite the large quarterly loss, ICG executives say the company has met and exceeded many of its financial goals, which included cutting corporate spending and focusing energies on improving the financial performance of its most-promising partner companies. ICG spent $36 million on operating expenses during the quarter, $10 million less than the company expected. ICG also invested another $120 million to acquire new companies and to provide additional financing in its partner companies. Again, the figure was less than expected. The company ended 2000 with $332 million in cash, short-term investments and securities available for sale. That figure is down from $514 million at the end of the third quarter. Solid in 2001 Looking forward, ICG says it expects to end 2001 with more than $200 million in its corporate coffers. "We are in a solid financial position," said Ed West, ICG`s chief financial officer. After the third quarter, ICG announced plans to focus much of its energies on 15 "developed" companies in its portfolio that have the best shot of providing ICG and its shareholders with near-term value. Today, ICG executives said those companies continue to perform well and are on target to become cash-flow positive within 18 months. In addition, ICG added another company, Blackboard, an e-learning infrastructure company, to its "developed" list. These 16 companies posted combined revenue of $56 million in the fourth quarter, a 21 percent increase from the third quarter, but less than the 33 percent growth racked up in the second quarter. ICG CEO Walter Buckley admits that some of his companies were impacted by the slowing economy, but he expects performances to improve. "We`re never satisfied with 21 percent growth, but it`s consistent with what you`re seeing with other companies in the market," he says. "We always want to see more growth and I think we can get it." Trying for a home run ICG better get that growth soon, because the sour markets are not helping ICG`s cause. As a quasi-incubator, ICG and its shareholders make money when the portfolio companies go public or are sold off. But the IPO market is all but shutdown, especially to b-to-b companies, and merger and acquisition activity is anemic at best. ICG has been able to sell off several of its portfolio companies at respectable returns, but many of these companies are worth far less today than they were just one year ago. "It will only take one or two home runs for ICG to make a move, but I don`t see any yet," says Jon Ekoniak, an analyst with U.S. Bancorp Piper Jaffray. Adam Feuerstein covers e-commerce for UpsideToday. Reach him at adamf@upside.com. If you would like to submit a letter to the editor regarding this story, email online@upside.com. |
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| aus der Diskussion: | INTERNET CAPITAL GROUP - es geht los ? |
| Autor (Datum des Eintrages): | guuruh (22.02.01 19:38:58) |
| Beitrag: | 95 von 17,989 (ID:2963870) |
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