Shares in online community theglobe.com Inc fell as much as 28% Friday after the company warned that third-quarter revenue will fall short of analysts estimates. The stock shed as much as $3.8125 before rallying late to close at $11.0625, down $2.5625, or 19%, on the day. The session saw 3.7 million shares trade hands, compared to the company’s average daily volume of just 709,000.
The latest dip means that the stock has fallen 65.2% since last November, when it enjoyed the most successful first day of trading ever for a US issue, rising 606% in its maiden session to close at $63.50. Before a stock split in May, the 52-week high was $97, also attained on the first trading day. Investment bank Bear Stearns downgraded the shares from attractive to neutral after the warning.
The New York-based company said it does expect to meet earnings estimates for the quarter, which currently call for a loss of $0.34, but that revenue will likely come in between $4.7m and $5.1m, against estimates of about $5.1m. In the second quarter, theglobe.com Inc posted a loss of $6.7m, or $0.27 per share, on revenue of $4.1m.
The shortfall was blamed on the impact of delays in rolling out two new products; globelists.com, a network of email clubs based on user interest, and uPublish, a homepage and web site builder. Development of the products took longer than anticipated, the company said, with globelists launching in August and uPublish in October.
Theglobe said it plans to aggressively grow the two new products through a $27m marketing campaign which will run from November through the fourth quarter of 2000. Analysts surveyed by First Call have the company pegged to report steady losses ranging from $0.28 to $0.45 for the next six quarters. Full third-quarter earnings are due on November 3.
