Engage Inc. (Nasdaq: ENGA) shot up 15 percent Tuesday following news it will get $75 million in investments from CMGI Inc. (Nasdaq: CMGI) and Compaq Computer Corp. (NYSE: CPQ). The funds will be used for operating purposes and expansion.
Shares in the online marketer, which is majority-owned by CMGI, were up 2 5/16 to 17 3/4. Though the stock is down sharply from its 52-week high of 94 1/2, it topped estimates in its recent third quarter.
Under the terms of the deal, Engage will issue a total of about 5 million shares of common stock to CMGI and Compaq in return for investments of $50 million and $25 million, respectively. The investment is based on a five-day average closing price of Engage stock ended June 19. Other terms were not disclosed.
Engage said the investments validate its business strategy, and will help it continue to deliver the power of the Internet through higher return on investment to marketers into 2001.
The company's top competitors include DoubleClick (Nasdaq: DCLK), 24/7 Media (Nasdaq: TFSM) and Media Metrix (Nasdaq: MMXI).