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Nasdaq halts trading on Exodus

Amid bankruptcy rumors, trading halts on the Web-hosting business pending a news report from the company.

Trading has halted on Exodus Communications, pending a news report from the company.

Bankruptcy rumors have swirled around the embattled Web-hosting company. The stock, which hit a 52-week high of $62.38 last September, closed at 17 cents Tuesday.

An Exodus spokesman did not know when the announcement would take place, or what would be discussed. A note posted on Exodus' site said the Nasdaq halted the stock "based on rumors circulating yesterday about Exodus."

A Nasdaq spokesman wouldn't comment.

According to the Nasdaq, trading on the stock was halted at 4:47 a.m. PDT pending the release of material news.

Exodus' Web-hosting business has reflected the boom-and-bust cycle of the dot-com sector. At the height of the bubble, its business--which consists of managing and monitoring clients' Web sites and Internet-based applications on powerful servers in secure locations--thrived.

But as its dot-com clients died off, so did much of its revenue, although Exodus had been able to sign up new clients.

While Exodus is one of the leaders in the sector, it hasn't had that much other business to fall back on, as opposed to competitors like IBM. Even so, investors still expressed interest in the stock, saying the company could at least be a potential takeover target.

Earlier this month, CEO Ellen Hancock left, joining a long list of executives who have fled the ailing company. Hancock was replaced by director William Krause, who has served on the board of directors since June 2000.

Exodus posted a $583.4 million, or $1.05 per share, loss for the second quarter, about 100 times more than it lost in the year-ago quarter. In June, the company revealed it was spending money faster than previously thought, sending its stock plunging.

It had $616 million in cash on hand at the end of the second quarter and had been looking for new financing, which could have enabled it to scrape through until it reached back into the black.