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marchFIRST Stumbles, Admits Being $100 Million Short
Wednesday November 22 by Staff WriterAccording to its quarterly filing, marchFIRST will seek a total of $100 million by early next year to pay existing obligations. This amount is in addition to projected cash flow and the $27 million already in its coffers.
Recent setbacks have driven marchFIRST stock down nearly 50% this week, to close on Tuesday at a 52 week low of $1.56. The 52 week high for the stock was $81.13.
Last week it was announced that marchFIRST would cut 1,000 jobs, which is approximately 10% of its employees. Prior to that, it was announced that earnings would be lower than analysts had expected by 19 cents a share for the quarter. Based on the bad news, its stock was downgraded by several analysts and a host of shareholder class-action lawsuits have been filed.
In a move to retain employees, on Monday marchFIRST announced an employee stock option re-issuance program. Under the terms of the program, shares could be turned in and reissued in six months at the average price of trading that day. For every three shares turned in, one share would be issued. Analysts estimate that approximately 90% of employee stock options are worthless because the strike price is too high. The employee stock option re-issuance program may have also contributed to the falling stock price.
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