After Barron’s listed it as
number 33 on its list of companies ranked by their cash-depletion rates,
online advertising firm 24/7 Media
is defending itself, saying it has “sufficient
liquidity to carry the company to break-even on a cash basis without the
need to raise additional capital.”
The article — titled “Up In Smoke” — listed 227 companies it called “burn
victims,” and gave estimates for when they would run out of cash. This is a
follow-up to an article the publication ran three months ago, which sparked
much speculation and dashed investor confidence. In the initial story, 24/7
Media wasn’t ranked, but this time it’s number 33, with an estimated 6.4
months until burnout and $27.91 million cash on hand.
24/7 Media stock was trading at 14 13/16 late Monday afternoon — down 1/64
for the day.
24/7 Media says Barron’s failed to note the company’s acquisition of Exactis.com and its stakes in chinadotcom
corp. and Network
Commerce. The acquisition will give 24/7 new cash,
and the stock could be sold to raise cash, if necessary.
“Even at today’s depressed market prices, the cash and marketable
securities we have on our balance sheet are more than sufficient to carry
us past the point at which most analysts project we will achieve break-even
on a cash basis, which is currently the first half of 2002,” the company
said in a statement.
The Barron’s stories, as they educate investors about the relative burn
rates of Internet companies, are shaking up the markets as investors drop
many of the listed stocks like hot potatoes. Internet companies, like 24/7
Media, and analysts have criticized the Barron’s stories for being overly
simplistic and failing to take all of the relevant factors into consideration.
24/7 Media wasn’t the only Internet advertising and marketing company to
make the “burn victims” list, although it was ranked as being closest to
burnout. Next on the list was Promotions.com, ranked number 62, with
an estimated 11.8 months to burnout. MessageMedia came next at 68, with
12.3 months predicted. LifeMinders.com was listed at 95; Cybergold was listed at 96; Netcentives was at 101; FreeShop.com ranked number 132. Exactis.com (35.7 months) , MyPoints.com (41.8 months), Digital Impact (48.0 months), Mediaplex (63.7 months), and NetPerceptions (93.4 months) were
among those listed in the top 200.
