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Priceline.com Sets Reverse Stock Split

Priceline.com , the online travel site that has long suffered from the stigma of the dot-com bubble, on Monday finally took steps to allay investors' fears that its stock could ever get delisted.

The Norwalk, Conn.-based company also reaffirmed its previous guidance for the current second quarter that it would return to profitability with net income projected at 2 cents a share. The company hasn't record per-share profits since the second quarter of 2002.

The announcement comes as favorable sentiment begins to return to the Internet sector amid reassuring signs that the worst might be over. For example, McLeodUSA and iVillage recently announced that they have regained compliance to be listed on the NASDAQ.

"This reverse stock split enhances our position by expanding investor interest, reducing transaction costs for trading our stock, making our results more comparable to peer companies with far fewer outstanding shares, and allowing priceline.com's earnings per share on a post-split basis to more precisely reflect the Company's operating results," said priceline.com President and CEO Jeffery H. Boyd.

The company set the reverse stock split at a 1-for-6 ratio. As a result, each priceline.com stockholder will receive 1 new share of priceline.com common stock in exchange for every 6 old shares. The reverse stock split became effective at 12:01 a.m., Monday.

"Our previous pre-split guidance was for second-quarter earnings per share in the range of $0.02 to $0.03," said priceline.com Chief Financial Officer Robert J. Mylod, Jr. "On a post-split basis, this translates to earnings of between $0.12 to $0.18 per share, and we remain comfortable with estimates within that range."

The average First Call consensus earnings estimate for the second quarter 2003 was for net income of $3.6 million, which translates to $0.10 per share on a post-split basis.

The reverse split will reduce the number of common shares outstanding to approximately 37.5 million from approximately 227 million.