Excite@Home shares sank to a record low $1.40 each on news of an unappealing financing deal and the decision by Cox and Comcast to stop using the company as their sole provider of high-speed Internet service.
The MSOs will now do business with AOL, EarthLink and other Internet service providers. Controlling shareholder AT&T agreed to give cash-starved Excite@Home $85 million in financing. But the cable Internet company turned to a vulture fund, Promethean Capital, for $100 million, selling a convertible zero-coupon note. Asked why AT&T didn't put the money in during a conference call with analysts, Excite@Home executives had no answer. - John Higgins