Healtheon/WebMD shares shot up 6 5/8, or 31 percent, to 28 5/16 Friday after two prominent directors gave the company a vote of confidence Friday by requesting to purchase flagging shares on the open market.
Jim Clark, co-founder of Netscape and founder of Silicon Graphics (NYSE: SGI), and John Doerr, partner of venture capital firm Kleiner Perkins Caufield & Byers, will buy $220 million in Healtheon shares.
The move, an exception to usual trading rules, coincides with the company's announcement that revenue for the first quarter will be almost double that of the preceding quarter.
Jim Clark and John Doerr, two directors of Healtheon/WebMD Corporation (Nasdaq: HLTH) asked to be granted an exception to the company's trading restrictions in order to buy shares. Healtheon is hoping other investors follow the directors' lead.
The request has been granted, and Clark, Doerr, or other certain individuals may purchase the company's stock starting at noon today.
"I expect to increase my investment in Healtheon/WebMD by up to $200 million." said Clark in a release. Clark, who, along with his family currently has 11.7 million shares of Healtheon.
Doerr said he expects to invest up to $20 million in Healtheon/WebMD stock.
Healtheon could use the boost. Shares closed at 21 11/16, far below their 52-week high of 126 3/16. The stock has been losing ground since the company reported hefty losses in the fourth quarter.
The company said that in the quarter ended March 31, revenue should exceed $62 million, versus reported revenue of $33 million in the fourth quarter of 1999. Healtheon/WebMD also said Friday it expects to report a loss before non-cash charges, primarily depreciation and amortization, of less than $90 million for the first quarter of 2000.
First Call's consensus of 12 analysts sees the company losing 47 cents a share in its first quarter. Healtheon/WebMD did not indicate whether its pre-announced figures were above or below expectations.
The company expects to announce full first quarter 2000 financial results late April or early May, pending the completion of the independent appraisals of its recently closed transaction with News Corporation (NYSE: NWS) and its acquisition of Kinetra.
Healtheon's competitors include Shared Medical Systems (NYSE: SMS) and National Data (NYSE: NDC).
Reuters contributed to this report.