Nasdaq Halts Trading of MarchFirst Shares
Trading of MarchFirst Inc. shares was halted in mid-session Wednesday as rumors of layoffs and a possible sale of assets further undercut the technology consulting and Web-design company’s plummeting stock.
Company officials declined comment for a second straight day on published reports that it plans to lay off as much as half its work force of 7,000 employees.
After plunging 60% on Tuesday, MarchFirst shares stabilized and were unchanged at 16 cents a share in heavy volume when the Nasdaq Stock Market halted the stock’s trading after less than two hours Wednesday. Nasdaq issued a statement saying it had requested additional information from the Chicago company.
The shares had traded above $80 shortly after the company’s creation in December 1999, when the former Whittman-Hart Inc. bought San Francisco-based USWeb/CKS Inc. for $5.7 billion in stock.
Spokeswoman Kelly Miller said no statement was imminent but she refused to comment further.
Shares tumbled after the New York Times, citing unidentified executives close to the company, reported Tuesday that MarchFirst would lay off about 3,500 employees by the end of this week. The Wall Street Journal, also citing an unidentified source, said Wednesday that the company was about to announce the layoffs of 2,000 workers.
Adam Frisch, an analyst at UBS Warburg in New York, said the stock’s latest gyrations were driven by rumors of everything from staff cuts to a restructuring to a sale of assets or other steps, including splitting it into three separately financed regional units, but “nothing is substantiated.”
“I think it’ll go beyond layoffs,” Frisch said. “If Francisco Partners decides to not invest more money, the company is going to have to take some drastic measures.”
Francisco Partners, a San Francisco investment firm, bought a controlling 32% stake in the company for $150 million in December.
MarchFirst is one of several tech consulting companies that have been battered by a drastic drop in demand for Internet consulting and services in a tightened economy.
Last month, it reported a $7.7-billion loss on revenue of $1.2 billion in 2000.
Several top executives, including Chairman and Chief Executive Robert Bernard, have left the company this month.
