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Tech Industry

Ask Jeeves sliced in half

    Ask Jeeves saw its market value sliced in half Friday after a negative pre-announcement, and news that CEO Rob Wrubel will step down.

    Analysts downgraded the stock due to the fourth quarter shortfall, and anticipated problems in rebuilding management.

    Shares were down 4.94 to 4.75. The company said after the bell Thursday that it will post a wider-than-expected loss in its fourth quarter, and announced CEO Rob Wrubel was stepping down.

    Analyst Safa Rashtchy at U.S. Bancorp Piper Jaffray downgraded the stock to "neutral" from "buy."

    Robertson Stephens analyst Lowell Singer lowered his rating from "buy" to "market performer," and suspended 2001 and 2002 estimates while awaiting better visibility into the company's momentum.

    Ask Jeeves announced that it expects to report fourth quarter revenue of about $25 million, well below Singer's estimate of $36 million. The company sees a loss of 50 cents a share, also well below Singer's estimated loss of 33 cents a share.

    Singer cited the soft marketing environment for Ask Jeeves' shortfall, and said other Internet companies that rely heavily on Internet marketing could face pressure through the second quarter of 2001.

    "We believe that it could take a some time for Ask Jeeves to rebuild its management team," Singer added.

    Analyst Mandana Hormozi at Lazard Freres & Co. also downgraded the stock to "hold" from "outperform" just a month after initiating bullish coverage on the stock.