MyPoints Issues 120 Pink Slips
Facing a stock market that has bailed on many marketing sites, MyPoints restructures to survive.
Facing a stock market that has bailed on many marketing sites, MyPoints restructures to survive.
MyPoints.com Inc. Thursday posted some dismal financial news and let a third of its work force walk.
The Internet marketing outfit said it estimated the pro forma loss for the third quarter is expected to be between $14 million to $16 million, or a loss of 39 cents per share to 45 cents per share. This stack up against a loss of $8.3 million, or a loss of 40 cents per share, reported in the same period last year.
MyPoints expects to report revenues for the third quarter ended Sept. 30, 2000 in the range of $13.5 million to $14.5 million versus $7 million reported in the third quarter of 1999.
While offering what has recently become the standard “looking to streamline its business” phrase, MyPoints said in a company statement Thursday that the 120 staff cuts were mostly in technology, production and administrative positions. The company said it hopes to recuperate $8 million in annual savings with the reorganization.
MyPoints Chairman and Chief Executive Officer Steve Markowitz said third quarter results were impacted by industry-wide cutbacks in online advertising spending.
“We are disappointed that weak demand for Internet marketing services negatively impacted our third quarter results,” Markowitz said. “However, during the period we continued to grow membership and added new shopping partners and leading names to our client roster. While sales picked up in September, they were not strong enough to offset the weakness of the prior two months and prevailing market conditions.”
MyPoints.com expects to release full financial results for the third quarter at the close of trading on Nov. 2, 2000.
Signs of discontent for MyPoints.com became visible in August when Merrill Lynch Internet stock analyst Henry Blodget rated the firm, which enjoyed a 52-week high of $97.68, a “near-term buy.” The stock was trading at $13.50 then.
On Thursday, shares of MyPoints.com closed at $4.88.
The Internet marketing sector is seeing a lag similar to the one that has plagued several e-commerce companies in the past few months. On Monday, mValue closed its doors, laying off 30 employees in addition to the 23 it canned in August.
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