Excite@Home Corp. stock dropped 41 cents per share Monday, closing at 47
cents, after the company filed an amended annual report stating that its
auditors had doubts about its ability to continue as a going concern.
Excite@Home has been in trouble for months, and it said in July that it will
need additional capital to fund its operations through the end of the year.
The company already raised $100 million through the sale of convertible notes
to Promethean Capital Group LLC and through an $85 million sale/lease-back deal
with AT&T Corp. for Excite@Home's backbone network.
AT&T owns about 23 percent of equity and 74 percent voting control in
Excite@Home.
Excite@Home lost about $346.3 million in the second quarter, mainly due to
poor performance at its media unit, which consists primarily of its Excite Web portal.
In its amended annual report filed with the Securities and Exchange
Commission, Excite@Home's auditors -- Ernst & Young LLP -- wrote that the
company did not meet the NASDAQ National Market System's minimum listing
requirements for net assets, shareholders' equity and stock price.
If Excite@Home were to be delisted from the NASDAQ Exchange, it could trigger
an acceleration of payment of the convertible notes in cash.
In the document, Excite@Home said its shareholders have approved a reverse
stock split that would increase its share price to $3 each, but the company
added that it could not assure that the price could be
sustained.
