With its stock hovering around $1, theglobe.com (Nasdaq: TGLO) announced its latest troubles Friday. The former poster child of dot-com mania said it will have sharper losses in the third quarter due to a slowdown in advertising spending, and will restructure its advertising sales department.
Shares in the company, which provides community tools and services, closed at 1 Thursday, bringing the company down to the level that it risks being delisted from the Nasdaq. That’s a long way down from its 52-week high of 97. Until VA Linux (Nasdaq: LNUX) came along, the high-flying company was known as having the largest one-day IPO gain in history.
For its third quarter, theglobe.com expects to report revenues of between $6.1 million and $6.4 million and a pro forma loss of between 37 cents and 35 cents a share. First Call did not have a consensus estimate for the stock. The company's second quarter and new CEO appointment went largely unnoticed, since the analysts have all dropped coverage.
"Since joining theglobe.com in August, I have conducted a thorough review of the company's business units, advertising sales functions, games products distribution initiatives, and cost structure and I believe more than ever that there is significant value within theglobe.com's model that has yet to be realized," stated CEO Chuck Peck in a release.
The company will be aimed at capitalizing on the expected long-term growth in advertising spending, and focusing on expanding revenue growth through additional channels and product enhancements. The company said it should be on a clear path to profitability entering 2001.
The company plans to diversify its revenue base with deals to generate recurring revenues from licensing fees for theglobe.com's community tools and expertise. It is also experimenting with direct marketing initiatives to target the commercial training industry and professional associations.
When theglobe.com announces third quarter results on Oct. 26, it will discuss other plans to "unlock the value" in its business model, and a timeline for achieving its objectives. It will also provide guidance for the fourth quarter of 2000 and full-year 2001.