Tech Thrashing Steepens Chase's VC Woes

Another selloff in the Nasdaq means more pain in the Chase Capital portfolio.
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The damage done to Chase (CMB) by its exposure to New Economy stocks, examined Wednesday by the TheStreet.com, worsened Thursday as the selloff in the tech-centric Nasdaq continued.

Through its venture capital arm

Chase Capital Partners

, the nation's third-biggest bank has large stakes in many publicly traded tech firms. Recent drops in the value of Chase Capital's holdings make it more likely that the New York bank's first-quarter earnings will fall below $1.53 per share, the number analysts expect, according to

First Call/Thomson Financial

. Chase factors the companies' quarterly market gains or losses into profit calculations for each quarter.

Chase shares again were hit by tech-market jitters, skidding 2 57/64, or 3.2%, to trade at 87 31/64 Thursday. That's a steeper decline than suffered by large banks in general: They retreated 1.7% Thursday, going by the

KBW Bank Index

. Chase declined to comment.

One analyst had calculated that the overall market gain for Chase Capital companies Wednesday was $50 million in the quarter. With Thursday's drops, however, the portfolio of public companies almost certainly had a negative return.

Many of the companies in which Chase Capital has holdings suffered badly Thursday, deepening first-quarter (through March 30) losses. For example,

Cobalt

(COBT)

, a provider of Internet technology, fell 5.3% Thursday, taking the first-quarter decline in its stock to 53%. Assuming Chase hasn't sold any Cobalt shares since the end of last year, the market cap of its Cobalt stake has fallen by $139 million, to $126 million, this quarter.

Other notable victims of the Nasdaq swoon were

iXL

(IIXL)

, down 6.6% Thursday, and

Triton PCS

(TPCS)

, off 5.5%.

The slide in Nasdaq stocks "certainly doesn't bode well. This market has been a huge driver behind what was, in the fourth quarter, an outsized part of Chase's business," says Sean Ryan, analyst at White Plains, N.Y.-based bank-stock brokerage

Byrne Ryan

, which doesn't do underwriting and doesn't rate Chase.

Below is an updated table published in the Wednesday piece.