Gets $50 Million Cash Infusion

Name-your-own price e-commerce company received a much-needed $50-million
cash infusion today from two of the wealthiest companies in Hong Kong: Hutchison Whampoa Limited and
Cheung Kong Holdings Ltd.

Hutchison — an international conglomerate whose holdings include telecommunication properties, shipping assets and resort hotels — already has joined with in an alliance to bring the latter’s business concept to 2.6 billion consumers in Asia. Cheung Kong, the largest real estate holder in Hong Kong, is owned by Lee Ka Seng, the richest man in Hong Kong who also has strong ties with the Chinese government in Beijing.

The transaction also represents a major bailout for founder Jay S. Walker. Hutchison and Cheung Kong have agreed to purchase an aggregate of 11.3 million shares from Walker for an aggregate price of approximately $24 million.

After the bell, reported a pro forma net loss for the fourth
quarter 2000 of $25 million, or 15 cents per share, before restructuring and
special charges. That compares to a fourth quarter 1999 pro forma net loss of
$10.0 million, or 6 cents per share.

Analysts on average were forecasting a loss of 7 cents a share, compared with
a loss of 6 cents in the same period a year earlier.

However, Norwalk, CT-based Priceline said in a statement accompanying its earnings report that
as a result of its restructuring efforts, it actually “expects a pro forma
operating profit by the second quarter of this year.”

To date, Priceline has never made any money.

Priceline stock closed Thursday at $3, up almost 44 cents. Its
52-week high is more than $104 per share.

Hutchison and Cheung Kong said they purchased about 24 million shares of Priceline
common stock at $2.10 per share, a price determined based on the market price
of the stock during the negotiation period. Hutchison also will receive a
seat on’s board of directors.

“We know well from our venture in Asia, and are excited by its
long-term growth prospects,” said Hutchison Group Managing Director Canning
Fok. “We are impressed with the proven strength of’s business
model, and the tremendous brand recognition that it has built since its
inception only three years ago…”

Priceline in its earnings report said revenue in the fourth quarter 2000 was
$228.2 million, an increase of 34.8 percent over revenue of $169.2 million in
the same period a year earlier.

Full-year 2000 revenue reached $1.24 billion, compared to $482.4 million
reported in 1999.

During the fourth quarter, said it recognized a $66.8 million
charge — $37.3 million of which was non-cash — for restructuring and
special items in connection with the company’s turnaround plan. President and CEO Daniel H. Schulman said that the fourth
quarter, “…in addition to being our seasonally weakest quarter … was
adversely affected by the closing of WebHouse Club, negative news stories
about customer satisfaction and the difficulties of other e-commerce

“’s management never doubted the viability and promise of our
business,” he said. “We committed to executing a six-point plan that would
motivate and retain our employees, strategically refocus our resources on our
core products, with a particular emphasis on travel, strengthen our product
offerings and customer service, strengthen our international relationships,
manage our business toward profitability, and strengthen our balance sheet.
Over the past months, has executed on its plan and has made
significant strides in each of these areas.”

Hutchison also reaffirmed its commitment to’s business model by
increasing its interest in Hutchison-Priceline Limited, the companies’

venture. Hutchison said it will purchase $9.5 million worth of HPL
convertible notes, increasing its HPL interest to 65 percent.

Hutchison and Cheung Kong also will receive for a period of six months the
exclusive rights to negotiate with for the setup of a potential
business in Japan.

Meanwhile, Microsoft co-founder Paul Allen’s venture capital company, Vulcan
Ventures Inc., has bailed out of, selling a 6.2 percent stake in
the company.

According to filings with the Securities and Exchange Commission, Vulcan
Ventures had owned about 9.1 million common shares of Priceline. The filing
didn’t say when the final sales were made.

Priceline ran into trouble last fall when it missed earnings estimates and
its advertising was called into question. Last December the company cut its
workforce and announced a back-to-basics strategy.

Seattle-based Vulcan has been concerned about technology stocks since the
middle of 1999 because of “overvaluation” in the markets, Bloomberg News
quoted spokesperson Susan Pierson Brown as saying. She added that the sale was part of that view.

“We continue to be concerned about the state of the market, and as such we
expect to be more frequently a seller than a buyer in the near term,” she was
quoted as saying.

News Around the Web