Commerce One Nears End Of The Line
The company delivered the sobering news in a Securities and Exchange Commission filing that warned shareholders shouldn't expect to receive anything after Commerce One closes its doors.
The end appears imminent, although last Thursday's disclosure didn't set specific timetable. Down to its last $700,000, the San Francisco-based company said its expenses continue to outstrip its revenue and management has been unsuccessful in its efforts to arrange additional financing.
"We anticipate that we will eventually wind down our business and may file for bankruptcy," Commerce One said. If that happens, the company doesn't expect to be able to pay all its bills, let alone distribute any money to shareholders.
Commerce One didn't immediately respond to requests for comment.
The company's failure isn't a surprise, coming after years of uninterrupted losses and a recent series of mass layoffs. Commerce One has lost $3.7 billion since its 1994 inception, a streak of adversity that eventually led to the elimination of 3,600 jobs during the past four years as the company scrambled to survive.
Thursday's mortifying denouement would have seemed inconceivable to investors less than five years ago.
Back then, Commerce One was lionized as a software pioneer that planned to create online exchanges to revolutionize the way businesses bought and sold goods.
The enthusiasm about this so-called "business-to-business" software caused Commerce One's stock to soar above a split-adjusted $1,300 in early 2000, giving the company a market value of $20 billion. Commerce One's shares plunged 27 cents to 34 cents during Thursday's trading on the Nasdaq Stock Market, leaving the company with a market value of $13 million.
Investors weren't the only ones caught up in the hype about Commerce One. Germany-based SAP, a well-established business software maker, was so excited about Commerce One's prospects that it formed a partnership with the company in 2000. That alliance began to disintegrate several years ago, leaving Commerce One even more destitute.
As Commerce One's problems mounted in late 2002, some industry analysts and investors began to question whether the company would be better off shutting its doors and distributing its remaining assets to shareholders. Commerce One still had about $113 million in cash at the end of 2002.
But Commerce One Chairman Mark Hoffman maintained that the company could bounce back by trimming expenses and focusing exclusively on a single software application designed to expedite online transactions.
"We believe we can create a higher shareholder value," Hoffman told The Associated Press in early 2003. "If we didn't believe that, then (we) should just distribute our cash to shareholders."
Hoffman, who previously co-founded database software maker Sybase, received a salary of $286,250 last year. He once owned Commerce One stock worth nearly $1 billion.
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