Giga's president resigns
Giga, after postponing its IPO, announces the resignation of its president and chief operating officer.
Ken Marshall, who joined the company when it launched last year, is leaving to pursue other interests, the company said.
Henry Givray, Giga senior vice president of corporate development, has been named president and chief operating officer.
Givray has been responsible for overseeing content, technology and channel partnerships along with acquisitions since joining the research firm last September.
"While relatively new to Giga, Henry Givray has quickly become a key member of the senior management team," said Gideon Gartner, chairman and founder. "His style of leadership, his sharing of the Giga vision, as well as his thorough knowledge of the IT market will serve our company well."
Giga, faced with a failed IPO and a sizable quarterly loss, has said it may seek an alternative financing arrangement to pay for its continued growth.
"We are considering other financing," said Jeff Swartz, Giga's vice president of marketing for the Cambridge, Massachusetts-based research firm specializing in information technology.
David Menlow, president of IPO Financial Network, said Giga, like Wired Ventures--the Internet publishing empire that postponed its IPO earlier this fall--failed to capture Wall Street's attention and then made the fatal error of marking down its shares. He said Giga is unlikely to float the stock before next year and will probably seek bank financing instead.
"They are pretty much done for 1996. I don't see a market that is going to have that many new dynamics," Menlow said. He said both Wired Ventures and Giga made themselves into "shark bait" by reducing the per-share price of the offerings.
According to an IPO registration filed by the company last September, it had planned to raise up to $50.6 million in funds. By early November, the company had marked down the per-share price as well as toned down the estimate to $31.9 million in proceeds, according to a filing with the Securities and Exchange Commission.
Giga originally expected to offer 4 million shares priced between $9 to $11 per share, but marked down the shares to $8 to $10 a piece according to the November 5 filing. The company would have had nearly 17.7 million shares outstanding with a value of $177 million.
Giga was founded last year by Gideon I. Gartner, the founder and long-time chairman of the Gartner Group, which bears his name and competes directly against Giga. With his new company, Gartner is trying to consolidate his latest information technology analysis business with services that include GigaWeb, which gives subscribers online access to company research, and other services which use software agents to personalize information for subscribers. The subscription service, which were launched in April 1996, has grown to represent nearly a third of the company's $3.2 million revenues for the quarter that ended September 30.
Yet subscription sales were not enough to offset operating expenses. Giga posted a $5.3 million operating loss for the quarter ending in September, and a total of $21.5 million since opening its doors in March of last year. Expansion of analysts, marketing, and sales staff was a factor in the losses, the company told the SEC. The company estimated it would continue to lose money at least through next year, as it continues to expand and develop the company.
With the offering, Giga would have floated about 22.5 percent of the company's common stock. Gartner would have retained a 36 percent stake and other company officers would have held on to a total of 19 percent, according to the November filing.
Meanwhile, Gartner Group announced today record earnings of $394.7 million for the year ending September 30, up 34 percent from the previous year's earnings. After a $33.2 million one-time charge related to its acquisitions of Dataquest and the J3 Learning Corporation, net income was $16.4 million, or 17 cents a share, the Garnter Group said.