Sep 26, 2001 : Exodus Files for Bankruptcy
📅 - Troubled Web hosting firm Exodus Communications said Wednesday it had filed for Chapter 11 bankruptcy protection while it tried to hammer out a financial restructuring plan.
The company also said it had secured up to $200 million in debtor-in-possession financing from GE Capital to fund operations.
Exodus shares plummeted from an all-time high of more than $80 in early 2000 to less than twenty cents this week in the wake of the dot-com crash. Many of the firms to scale back their offerings or go bankrupt during recent market turbulence were Exodus customers.
William Krause, who took over from long-time CEO Ellen Hancock earlier this month, said the company's problems were a case of growing too large too quickly. "We sacrificed profitability in exchange for growth and market share, over-expanding in some areas in advance of demand, not anticipating the decline as the dot-com bubble burst and the economy weakened,'' he said in a statement. "But the investments made in IDCs, state-of-the-art operations, customer support, and enhanced products and service offerings are greatly valued by our customers. While we address our balance sheet issues, it is these assets that form the strong base from which we will restore Exodus to financial stability."
While the company did not announce any job cuts, a memo obtained by Marketwatch.com that is supposedly circulating throughout Exodus says additional cuts are imminent.
Exodus currently has 4,000 customers, 44 data centers and approximately 2,700 employees.
The company also said it had secured up to $200 million in debtor-in-possession financing from GE Capital to fund operations.
Exodus shares plummeted from an all-time high of more than $80 in early 2000 to less than twenty cents this week in the wake of the dot-com crash. Many of the firms to scale back their offerings or go bankrupt during recent market turbulence were Exodus customers.
William Krause, who took over from long-time CEO Ellen Hancock earlier this month, said the company's problems were a case of growing too large too quickly. "We sacrificed profitability in exchange for growth and market share, over-expanding in some areas in advance of demand, not anticipating the decline as the dot-com bubble burst and the economy weakened,'' he said in a statement. "But the investments made in IDCs, state-of-the-art operations, customer support, and enhanced products and service offerings are greatly valued by our customers. While we address our balance sheet issues, it is these assets that form the strong base from which we will restore Exodus to financial stability."
While the company did not announce any job cuts, a memo obtained by Marketwatch.com that is supposedly circulating throughout Exodus says additional cuts are imminent.
Exodus currently has 4,000 customers, 44 data centers and approximately 2,700 employees.
Reads: 1120 | Category: General | Source: TheWHIR : Web Host Industry Reviews
URL source: http://www.thewhir.com/marketwatch/exodus926.cfm
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