From: Sally Khudairi (email@example.com)
Date: Fri Jan 28 2000 - 21:26:45 PST
Theglobe.com's Once-High-Flying Founders Stepping Down
Oh, how the mighty have fallen. One-time boy wonders Todd. V.
Krizelman and Stephan J. Paternot, cofounders and co-CEOs of
theglobe.com ( http://www.theglobe.com ) are out.
The two became poster boys for 1998's IPO frenzy after
theglobe.com went public and saw is shares quickly rise from
$4.50 to a split-adjusted price of $45.80.
Since then, the stock has sagged to trade at under $10 a
share. Thursday, theglobe.com, a network of online
communities, announced that the two have stepped down as
co-CEOs and that the company is searching for a replacement.
The company's chief operating officer, Dean Daniels, a
veteran of CBS, was promoted to president. The announcement
comes a day after theglobe.com reported a
narrower-than-expected loss of $11.1 million, or 41 cents a
share, compared to a loss of 26 cents a share during the same
period last year.
Although the company's spectacular IPO was driven by a mania
for community sites, theglobe.com's traffic has lagged far
behind industry leaders AOL, Yahoo, Microsoft, Lycos, and
Excite in attracting users. According to Neilsen/Netratings,
theglobe.com ranked 136th overall for traffic in October,
falling to 149th in November before rising to 126th in
Krizelman and Paternot, who founded theglobe.com while
students at Cornell University, won't be found panhandling
anytime soon. They are both remaining on the firm's board of
directors, and a glance at the S-1 statement the company
filed when it made a secondary stock offering last spring
shows the two could be eligible for generous severance
packages –- a little-mentioned perk for high-profile
employees that could get more attention as layoffs and
shakeups at former high flyers like Beyond.com and Value
America make headlines.
Theglobe.com did not immediately return calls asking for
details, and it was not clear on exactly what terms Krizelman
and Paternot left their roles as CEOs. However, upon their
termination, each is entitled to get one year of their annual
salary of $125,000 and benefits, according to employment
contracts set to expire in August 2002 outlined in the S-1
statement. In addition, all their stock options will vest
Not that those are worth what they used to be. Shares in
theglobe.com dropped $1.06, or 11.81 percent, to $7.94,
Friday, down from a 52-week high of $42.75.
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