Return to Virginia Business - April 2001

Cover Story
Highflyers hit hard times

Related stories:
• It Really Is That Bad
• Companies to Watch
• The High-Tech Way of Giving
• Lessons from the Dot-Com Crash
• Chart: Tech Firms and Red Ink
• Chart: Profitable Tech Firms

AOL Time Warner
$112 billion merger created a giant but did little for AOL’s market cap. Stock was around $50 when the merger was announced in January 2000 and has slipped to around $40 since then. New company — headquartered in New York City — laid off 2,000 in January, including 300 workers in Northern Virginia.

PSINet
Ashburn-based fiber-optic network firm acquired 74 companies in less than three years and grew to 10,000 employees — apparently ahead of market demand. Burned through $1 billion in two quarters of 2000; shares peaked at near $60 in March, sank to 78 cents in December. Now selling off parts to raise cash.

Teligent
Vienna-based fixed wireless business raised $1.7 billion by pitching its broadband system. Stock hit $100 a share in March 2000 but dropped below $2 early this year. Reorganized this year into three parts; laid off more than 1,000 workers. Got $250 million in funding in December to carry it through mid-2001 but is looking for more money — or maybe a buyer.

MicroStrategy
Vienna-based company’s stock peaked at $313 in March 2000. Then the firm that bragged about its revenue growth stunned investors when it had to restate earnings — and 1998 and 1999 profits became losses. Stock dropped 62 percent in one day. Losses in 2000 totaled $261 million, up from $33.7 million in 1999.

Net2000
The Herndon-based telephone firm famous for putting top employees in luxury cars sent 10 percent of its work force home for good in January and announced plans to scale back expansion.

WorldCom
CEO Bernard Ebbers had visions last spring of building the perfect telecom giant with proposed $129 billion purchase of Sprint, but Justice Department killed the deal. Company — which owns Ashburn-based UUNet — is retooling to focus on business customers. Announced plans in January to lay off up to 15 percent of work force.

Network Access Solutions
Herndon-based seller of high-speed Internet access saw stock peak at $40 last February. Laid off 145 people in September; sold off 400 network operations centers to reduce debt. Abandoned plans to expand its nationwide network for new focus on big clients. Stock selling for less than $1 in January. Says it has money to last till 2003.

Return to Virginia Business - April 2001