CMGI reports loss, announces 2-for-1 stock split
The Internet venture capital company posts a fiscal first-quarter loss as expenses climb almost sevenfold and says it will split its shares 2-for-1.
CMGI's shares rose 32.38 to 232.13 on electronic networks and regional exchanges after the 4 p.m. EST close of trading on the Nasdaq stock market. During the regular session, it fell 6 to 199.75. The shares are up more than sevenfold so far this year.
CMGI lost $117.4 million, or $1.08 a share, in the quarter ended Oct. 31, compared with a profit of $38.3 million, or 42 cents a share, in the year-ago period. That was less than the $1.76 a share loss expected by three analysts polled by First Call.
Revenue more than tripled to $123.7 million from $37.4 million. Expenses rose to $398.3 million from $57.5 million.
CMGI invests in Internet and software companies through several funds, with the goal of taking them public or selling them to other investors at a profit. It has gained a reputation for making savvy bets after its early investments became top Internet companies--including Lycos, one of the most popular Web search services, and free home page service GeoCities, which was bought by Yahoo for $2.87 billion in May.
Andover, Mass.-based CMGI said it will split its shares Jan. 11 to shareholders of record Dec.28. CMGI has split its stock twice this year.
Internet companies that have announced stock splits typically see their shares surge. That's because investors snap up shares of companies once splits are announced on the belief that the shares will soar even higher because the stock appears more affordable to other investors. Existing shareholders still own the same percentage of the company's stock after the split.
CMGI said expenses related to acquisitions rose to $170 million from $2 million in the year-earlier period. CMGI bought several companies during the quarter, including the purchase of a majority stake in AltaVista, the Internet search site, from Compaq Computer for $2.3 billion.
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