Stock market drops Open Market
Internet commerce software vendor Open Market sees its stock get drubbed after it failed to meet Wall Street's expectations on its earnings report.
The stock fell 2-15/32 to close at 12-5/8, off 16 percent on the day. It traded as low as 12 during today's session after it reported revenues of $8.4 million for the last three months of 1996, compared to $1 million a year earlier.
But Open Market lost $7.1 million, or 25 cents a share, for the quarter ending December 31, 2 cents worse than Wall Street's consensus expectation, according to First Call. The loss was an improvement over the year-earlier period when the company lost 28 cents per share. Fourth-quarter revenues climbed 25 percent from $6.7 million the prior quarter.
The company announced Wednesday it would spend $12 million in stock and cash to buy tiny Waypoint Software, which is beta-testing software to create business-to-business catalogs for the Internet.
"Our international business this quarter was over 40 percent of revenue," said Bob Weinberger, Open Market's vice president of marketing, naming British Telecom, Internet service provider Pipex, and Italy's CM Telecom as big European customers. The company just opened an international support center in the Netherlands.
In Japan, Mitsubishi Electric Information Network licensed Open Market's software last quarter.
For the year 1996, Open Market reported revenues of $22.5 million, compared with $1.8 million in 1995. Losses in 1996 totaled $26.5 million or 96 cents a share, compared to a net loss of $13.8 million or 53 cents per share for the same period of the prior year.
Open Market sells software for running the back end of complex Web commerce sites, with the basic package selling for $250,000. In the last year, the company has shifted to an off-the-shelf approach--boosting product revenues--rather than heavy customizing for a particular site.
Weinberger said the company is emphasizing three markets: Web hosting services like AT&T EasyCommerce that offer e-commerce outsourcing for Internet storefronts; business-to-business catalogers; and "information commerce," sellers of software and other digital data like music, business information, and eventually video.
Weinberger also indicated that Open Market has been discussing a cheaper package for midsized companies that don't need all the capabilities of high-end OM-Transact software.
In the last quarter, Open Market announced sales to Barron's Online, Disney Online, CNET, and mutual fund giant Vanguard.