Pasadena, California internet service provider Earthlink Network Inc has been looking for cash to continue network expansion since last month, when it announced that its reserves would not carry it through to the end of the year (CI No 3,225). It appears to have succeeded to the tune of $15m in the form of a private placement of unregistered common shares with a group of investors headed by Soros Fund Management LLC. George Soros’ outfit – in a transaction handled by its Quantum Industrial Partners LDC unit – took a $5m chunk of the stock being offered, and the rest was scooped up by existing shareholders and members of Earthlink’s board and management team. The proceeds will go into funding the expansion that Earthlink hopes will lead it to profitability, something it has never seen. In July, the company reported six- month losses of $16.1m on revenue of $34.6m (CI No 3,207). Earthlink shares, which traded as high as $20 after January’s initial public offering and fell to just over $11 after last month’s announcement, closed Thursday at $14.25, down $0.625.
