DRKOOP.COM: Future Looks Grim for Cash-Strapped Company
In what could be the final blow to financially ailing Drkoop.com, the Internet health care company yesterday announced that its losses last quarter will "far exceed" analysts' estimates, and two top executives have resigned, the Los Angeles Times reports. Although PC Data Online ranks Drkoop.com fifth among health Web sites and reports the site receives nearly 800,000 visitors per week, the company has encountered difficulties turning popularity into profit. The company reported that it will lose $1.15 to $1.18 per share, or $40 million, for the quarter that ended June 30. More damaging, analysts argue, is the company's steady decline in revenue, from $4.7 million in the first quarter this year to an estimated $2.5 million to $3 million last quarter (Dunn, 7/18). The company's problems multiplied yesterday after it announced that COO Dennis Upah and CFO Susan Georgen-Saad had resigned (Wall Street Journal, 7/18). "It just goes from bad to worse to even worse than that," Claudine Singer, an analyst at Internet research firm Jupiter Communications, said. She added, "They really need to be bought, and this is not any help. They are going to flatline any minute. There's a shroud of death hanging over them" ( New York Daily News, 7/18). Casting one last ray of hope, however, the company yesterday said it had secured a $3 million line of credit last month. Still, analysts indicated that the credit line will only "delay the inevitable." Josh Fisher of San Francisco-based WR Hambrecht & Co. said, "They're in the hospice and on their death bed." Most analysts agree that a merger or sale are the only options for the cash-strapped company (Los Angeles Times, 7/18).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.