Will Metricom fade at summer's end?
The unprofitable provider of the Ricochet wireless Internet service only has enough cash to last through August, according to a regulatory filing.
Metricom had $327 million in working capital on Feb. 28, the company said in a filing with the Securities and Exchange Commission. It will need about $500 million to reach positive cash flow, the filing says.
The company, whose biggest investors include Microsoft co-founder Paul Allen and WorldCom, has struggled to build its wireless system and find partners to sell the service. The San Jose, Calif.-based company has racked up more than $500 million in losses, and its stock has fallen 95 percent in the past year.
Company executives weren't immediately available to comment.
Metricom's Ricochet service had 34,000 subscribers as of Dec. 31. The company sells the high-speed service in 13 markets, and a slower service in two additional markets.
The company on Feb. 8 said it only had enough money to operate and build its network into the second half of the year. Timothy Dreisbach resigned as chairman and chief executive later that month and was replaced on an interim basis by Ralph Derrickson, a board member since 1998.
If Metricom isn't able to obtain additional funding, it will "significantly reduce" its operations in the third quarter, the filing said. Metricom on March 15 said it cut 179 jobs, or 22 percent of its U.S. work force.
Allen controlled 65 percent of Metricom in February. WorldCom has invested $300 million in the company.
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