With fiscal fourth quarter losses widening by some 85 percent, Silicon Alley
investment bank WIT SoundView Group, Inc. said Wednesday it would lay off 60 employees and reduce its earnings outlook in 2001.
WIT SoundView, which invests in Internet and technology companies, reported
fourth quarter losses of $25.7 million, or 24 cents per share, up from the
$8.1 million (13 cents per share) loss recorded during the same year-ago
quarter.
Fourth quarter revenues reached $92.0 million, up 14 percent from the third
quarter while full-year revenues were $375.5 million.
“The current capital markets environment can best be described as
challenging, particularly for investment banking services such as IPOs and
follow-on offerings. While we expect our institutional brokerage to continue
to grow, we expect overall revenues and earnings comparisons for the first
half to be down from last year’s reported results,” said WIT SoundVIEW CEO
Robert Lessin.
“(We) expect slower growth for 2001 than we had previously discussed. As we move ahead into the year, we will reassess our internal forecasts and as we have a clearer picture, we expect to be in a better position to provide the financial community and our shareholders with guidance on how the business
is doing and what we see for the balance of the year,” he added.
The company said the staff cuts, which represent about 14 percent of the
workforce, came after a “thorough review of personnel and market
conditions.”
“We have focused on retaining our key employees and, to more closely align
their interests with shareholders interests, our Board has approved
amendments to our stock incentive plan that allows us to grant an additional
20 million options to our employees, most of which are expected to be
granted by the end of the first quarter,” the company added.
Additionally, WitSoundview’s board of directors have authorized the
repurchase of up to 2 million shares on the open market from time to time.
“We’re very pleased to have achieved such strong revenue performance this
quarter, despite one of the most difficult capital markets environments in
recent history. Our performance, driven by the strength of our M&A and
institutional businesses, reflects the success of our efforts to diversify
revenues and create a long-term and stable business model,” the company’s
CEO added.
Immediately after the earnings announcement, Bear Stearns downgraded WITC’s
stock rating from “Buy” to “Neutral”. At midday, WITC stock was trading at $5.12,
down a few pennies from the $5.18 opening.
