( EXDS) managed to stop a losing streak today by announcing that it raised nearly three-quarters of a billion dollars by selling bonds and stocks.
The ability to raise any money at all merits notice, as worries over dying dot-coms and weakening corporate spending have savaged stocks that provide Internet services.
This fall and winter brought a steep slide for the service providers: Exodus has dropped 70.6% since Sept. 1, rival Web host company
has dropped 70.8% and competitor
has fallen 92% in the same period.
"They're trying to raise money in a environment where the market doesn't want anyone to raise money," said Cary Robinson of
U.S. Bancorp Piper Jaffray
who rates Exodus a strong buy. Piper Jaffray has done no underwriting for Exodus.
After dropping 19% yesterday -- its third straight decline -- Exodus traded higher today on the announcement it was raising roughly $740 million through offering convertible debt and 13 million shares of stock priced at $18.50.
The cash will give Exodus some room to expand, as it distances itself from lagging hosters such as NaviSite and
Exodus closed up 69 cents, or 3.7%, to $19.44.
The irony is that Exodus is one of the strongest players in offering Internet services. NaviSite said it was laying off 7% of its staff and closing a pair of sales offices. It fell 22 cents, or 6.1%, to $3.38.
Another Web service provider,
( CFLO), dropped significantly after reporting a loss, staff cuts and the resignation of its CFO.
CacheFlow, which warned last week, reported a much wider loss than expected on its third-quarter earnings, which declined from the previous quarter. The company makes caching devices that give faster access to Web site content.
CacheFlow said its losses resulted from a weaker spending climate and a longer-than-expected purchasing cycle.
It closed down $3.94, or 28.1%, to $10.06.