Sep 25, 2001 : Exodus To File For Bankruptcy: Report
📅 - Shares in Exodus Communications lost more than half their market value Tuesday after a report said the company was preparing to file for bankruptcy.
Shares in the California-based firm closed at an all-time low of 17 cents.
The Wall Street Journal, quoting sources "familiar to the situation", said the company was preparing a bankruptcy court filing and could file for Chapter 11 as early as this week.
According to the article, Exodus is considering "debtor-in-possession financing and other arrangements", and has been in contact with General Electric Co.'s GE Capital Corp., EDS and other in search of a financial solution.
Exodus shares have plummeted from an all-time high of $68.38 in the wake of the recent dot-com crash. Many of the firms to make use of Exodus' range of Web services were among the many Internet firms to file for bankruptcy.
Standard & Poor also cut Exodus' credit rating today, citing a negative financial outlook for the company.
"The rating actions are based on Exodus' deteriorating operating performance, vulnerable financial position and looming liquidity concerns," a release from Standard & Poor said. "These concerns are exacerbated by significant management departures and continued weakness in demand for information technology spending."
At least one analyst also believes job cuts are soon to be underway at the company as well. Andrew Schroepfer, president of independent research firm Tier 1 Research, told the ON24 Network today that Exodus will also cut its workforce from 2,700 employees to less than 2,000.
Earlier this month, the company replaced long-time CEO Ellen Hancock with board member Bill Krause, who vowed Exodus was "not going away" in a recent letter to clients.
"I am confident our current financial challenges can be fixed with the help of clear leadership and a tough-minded approach to managing the business for profitability," he said. Since Hancock was replaced, however, the company's share price has continued to fall.
Exodus currently has approximately 4,000 customers and maintains 44 data centers.
Shares in the California-based firm closed at an all-time low of 17 cents.
The Wall Street Journal, quoting sources "familiar to the situation", said the company was preparing a bankruptcy court filing and could file for Chapter 11 as early as this week.
According to the article, Exodus is considering "debtor-in-possession financing and other arrangements", and has been in contact with General Electric Co.'s GE Capital Corp., EDS and other in search of a financial solution.
Exodus shares have plummeted from an all-time high of $68.38 in the wake of the recent dot-com crash. Many of the firms to make use of Exodus' range of Web services were among the many Internet firms to file for bankruptcy.
Standard & Poor also cut Exodus' credit rating today, citing a negative financial outlook for the company.
"The rating actions are based on Exodus' deteriorating operating performance, vulnerable financial position and looming liquidity concerns," a release from Standard & Poor said. "These concerns are exacerbated by significant management departures and continued weakness in demand for information technology spending."
At least one analyst also believes job cuts are soon to be underway at the company as well. Andrew Schroepfer, president of independent research firm Tier 1 Research, told the ON24 Network today that Exodus will also cut its workforce from 2,700 employees to less than 2,000.
Earlier this month, the company replaced long-time CEO Ellen Hancock with board member Bill Krause, who vowed Exodus was "not going away" in a recent letter to clients.
"I am confident our current financial challenges can be fixed with the help of clear leadership and a tough-minded approach to managing the business for profitability," he said. Since Hancock was replaced, however, the company's share price has continued to fall.
Exodus currently has approximately 4,000 customers and maintains 44 data centers.
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