ExciteAtHome faces financial ruin
Things don't look good
ExciteAtHome could be on the verge of going titsup.com amid fears that it doesn't have enough cash to see it through to the end of the year.
Shares in the broadband and media outfit plunged by almost a half yesterday as investors deserted the troubled dotcom.
By the close ExciteAtHome's stock price had fallen to just 47 cents - a drop of 40 cents.
In a statement to the SEC the company said: "We will need financing to support our operations in the future, and financing may not be available to us on favorable terms or at all.
"Despite our recent convertible note financing and our recently announced backbone capacity agreement with AT&T, we will need to raise additional funds before the end of 2001 to support our business operations. If we are unsuccessful at raising sufficient funds, this would have a material adverse impact on our operations and liquidity."
And its auditors, Ernst & Young said that it had a "substantial doubt about the company's ability to continue as a going concern".
Standard & Poor moved swiftly and slashed its credit rating for the ailing outfit from "B-" to "CCC" - a rating only given to companies in dire financial straits.
Part of that downgrade is due to the fact that the company is burdened with almost a $1 billion in debt and made a net loss of $346 million in the last quarter.
Like many dotcoms ExciteAtHome has been hit hard by the steep downturn in advertising revenues. With this situation unlikely to improve in the near future, things now look bleak for ExciteAtHome.
On Friday it made a further 200 staff redundant, bringing the total number of job losses this year to around 800.
ExciteAtHome was created in 1999 following the merger of portal Excite.com and broadband outfit AtHome. On the face of it, the content and distribution deal made perfect sense. However, the combined outfit has consistently failed to deliver anything approaching a profit. ®