Former Dot-Com Powerhouse Close to Insolvency
Commerce One Inc., an Internet software maker valued at $20 billion at the peak of dot-com mania, is poised to go out of business as a pauper.
The company delivered the sobering news in a Securities and Exchange Commission filing that warned shareholders should not expect to receive anything after Commerce One closes its doors.
The end appears imminent, although Thursday’s disclosure did not set a specific timetable. Down to its last $700,000, the San Francisco-based company said expenses continued to outstrip revenue and that management had been unsuccessful in its efforts to arrange additional financing.
“We anticipate that we will eventually wind down our business and may file for bankruptcy,” Commerce One said.
If that happens, the company doesn’t expect to be able to pay all its bills, let alone distribute any money to its shareholders.
Commerce One did not respond to requests for comment.
The company’s failure is no surprise, coming after years of uninterrupted losses and a recent series of mass layoffs. Commerce One has lost $3.7 billion since its 1994 inception, a streak of adversity that eventually led to the elimination of 3,600 jobs in the last four years as the company scrambled to survive.
Thursday’s mortifying denouement would have seemed inconceivable to investors less than five years ago.
Back then, Commerce One was lionized as a software pioneer that planned to create online exchanges to revolutionize the way businesses bought and sold goods.
The enthusiasm about this so-called business-to-business software caused Commerce One’s stock to soar above a split-adjusted $1,300 in early 2000, giving the company a market value of $20 billion.
Commerce One’s shares fell 38 cents Thursday to close at 23 cents in Nasdaq trading, leaving the company with a market value of $8 million.
Investors were not the only ones caught up in the hype about Commerce One. Germany-based SAP, a well-established business software maker, formed a partnership with the company in 2000. That alliance eventually began to disintegrate, leaving Commerce One even more destitute.
