Just got this today from Infoweek. For those of you who were considering
PSINet as your ISP:
** PSINet Considers Putting Itself On The Block
ISP PSINet Inc. has hired investment bank Goldman Sachs & Co. to
investigate ways to improve its market value, up to and including
the possible sale of the company.
The announcement comes as PSINet suffers extensive financial
setbacks, particularly its $1.9 billion purchase of software
integrator and Web host Metamor Worldwide in June, a move widely
regarded as a mistake. "They overpaid and they overestimated
customer demand, especially in a soft economy," says Lisa Pierce,
a Giga Information Group analyst. "They're a one-trick pony; they
offer IP. It's great to offer IP, but it's not enough to sustain you."
PSINet's third-quarter revenue, released this month, was 22% lower
than expected, and the company reported a net loss of $1.38
billion. Harold Wills, PSINet's president and chief operating
officer, also has resigned. Shares of PSINet closed up 10.34%, to
$2, Thursday, but still nowhere near their 52-week high of $60.94.
What is Goldman Sachs likely to recommend? "It's a tough bet right
now," says William Klein, an analyst with Wasserstein Perella.
"The question is, is there any net equity value?" he says. Giga's
Pierce is equally unsure. "I wouldn't hazard a guess," she says,
"but if I were a customer, I'd be worried." - David M. Ewalt
Brian Boyes,
Systems Administrator,
Precision Resource Canada Ltd.
<http://www.precisionresource.com>
<mailto:brianb@...>
PSINet as your ISP:
** PSINet Considers Putting Itself On The Block
ISP PSINet Inc. has hired investment bank Goldman Sachs & Co. to
investigate ways to improve its market value, up to and including
the possible sale of the company.
The announcement comes as PSINet suffers extensive financial
setbacks, particularly its $1.9 billion purchase of software
integrator and Web host Metamor Worldwide in June, a move widely
regarded as a mistake. "They overpaid and they overestimated
customer demand, especially in a soft economy," says Lisa Pierce,
a Giga Information Group analyst. "They're a one-trick pony; they
offer IP. It's great to offer IP, but it's not enough to sustain you."
PSINet's third-quarter revenue, released this month, was 22% lower
than expected, and the company reported a net loss of $1.38
billion. Harold Wills, PSINet's president and chief operating
officer, also has resigned. Shares of PSINet closed up 10.34%, to
$2, Thursday, but still nowhere near their 52-week high of $60.94.
What is Goldman Sachs likely to recommend? "It's a tough bet right
now," says William Klein, an analyst with Wasserstein Perella.
"The question is, is there any net equity value?" he says. Giga's
Pierce is equally unsure. "I wouldn't hazard a guess," she says,
"but if I were a customer, I'd be worried." - David M. Ewalt
Brian Boyes,
Systems Administrator,
Precision Resource Canada Ltd.
<http://www.precisionresource.com>
<mailto:brianb@...>