A third of Web companies could run out of cash

NEW YORK: More than a third of publicly traded Internet firms seem destined

to run out of cash by the end of 2001, Barron's financial newspaper reported on

Sunday.

According to a study for Barron's conducted by Pegasus Research

International, publicly traded Internet companies used up about $2 billion in

cash in the third quarter of 2000.

That amount is roughly the same as that for the second quarter. The figures

cover 335 publicly traded companies in the battered Internet sector.

"We're seeing the financial pressure intensify as never before,"

Pegasus President Greg Kyle said. Previous Barron's reports on Internet

companies' cash positions have helped focus investor concerns on the firms'

health.

Barron's said the top 15 companies on its list actually were due to run out

of cash in the fourth quarter of 2000.

However, many were able to take "evasive action," the newspaper

said, such as raising money through a debt offering or through cash infusion.

Barron's listed seven companies as "ones to watch" because of

possible news - some good, some bad - on their cash positions in coming months.

For example, Barron's noted that retailer Fashionmall.com Inc. had attracted

suitors because its stock was trading for less than the value of the cash on its

balance sheet.

The focus stocks were: telecommunications provider Choice One Communications

Inc., the top company on Barron's list; discount clothing seller Bluefly Inc.,

information and entertainment company audiohighway.com, application services

provider TriZetto Group Inc., electronic commerce company Internet Commerce

& Communications Inc., postage service company Stamps.com Inc. and

Fashionmall.com.

(C) Reuters Limited 2001.