“Globes” has learned that VerticalNet Israel, formerly Tradeum, is cutting 35 positions, half of its workforce. Tradeum was bought by VerticalNet of the US (Nasdaq: VERT) in March 2000 for $474 million in shares.
VerticalNet is a B2B company operating vertical trade communities. Tradeum serves as the company’s software development arm. Company financial controller Doron Gaz said in response that would probably be changes in the company this week, but their scope was unclear.
VerticalNet is expected to publish its Q1 financial reports this week. The cutbacks are due to the US parent company’s difficulties. VerticalNet has slid from $119 at the date of Tradeum acquisition announcement to $2.06 on Friday, reflecting a current company value of $145 million.
VerticalNet published a profit warning in the fourth quarter, after missing analysts’ forecasts by $0.13 per share, losing $0.32 per share. Altogether, the company lost $207 million, while revenue totaled $112 million. The company’s cash balance at the end of 2000 stood at $145 million.
VerticalNet has cut 150 positions in the past few months, and replaced CEO Joseph Galli (formerly president of Amazon.com) with Michael Hagan. The company currently employee 1,170 people.
Tradeum was founded by Zvi Schreiber and Ilan Grobman in 1998. In August 1999, the company raised $3 million at a company value of $7 million, after money. Participants in the round included Israel Seed Limited Partners, Vertex III Venture Fund, and Benny Steinmetz, both as a private investor and through STI Ventures and Scorpio Communications. The company was sold six months later.
Published by Israel's Business Arena on 22 April 2001