Talk about a reversal of fortune.
The high-speed Internet service
is seeking shareholder approval for a reverse stock split, primarily to avoid getting delisted from the
Nasdaq Stock Market
-controlled company thus joins a growing number of tech outfits considering reverse splits -- issuing one new share to replace two or more old shares -- in order to shore up their ailing stock prices.
The rush to reverse split in recent months provides a poetic counterpoint to the stampede of splits in the other direction that Internet companies effected back when the market was much more bullish on tech stocks. In fact,
did a 2-for-1 stock split itself two years ago, before merging with
In the past month, companies that have announced their intention to do a reverse split, or have completed one, include
Excite@Home's stock, which peaked at $94.66, adjusted for that 1999 split, fell 58 cents Monday, or 21%, to close at $2.22.
The stock has been hammered in recent days after the company announced a financing deal that critics have labeled a
Reverse splits "are never a good thing," says Nick Moore, portfolio manager for
Jurika & Voyles.
But for Excite@Home, he says, the real story is the recent financing, which Moore says makes the stock a must-avoid. "You cannot own it here or there. You cannot own it anywhere," he says. Moore doesn't own the stock.