Sinking shares turn yesterday's acquirer into today's acquiree. Falling values also render employee stock options the ability to buy company shares at a predetermined price, hopefully much lower than where it trades into a cruel joke. Worst of all, cheap shares cut off new supplies of cash that are needed if a money-losing company hopes ever to build a sustainable business. The latest example of an unwelcome dot-com is Altavista, which on Friday pulled a public debut scheduled for this week.
Dot-Com Death Spiral
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The stock prices of many of last year's dot-com
darlings are down as much as ninety percent. The
gyrations of the markets may seem like a
distraction from day-to-day business, but that's
not the case in the New Economy, where stock is
the main currency for compensating staff and
consolidating competitors.