SNOWBALL CUTS STAFF BY THIRD
LOS ANGELES — Snowball.com, an online network targeting users aged 13-30, said Tuesday it will slash one-third of its workforce, or 55 employees, in a cost-cutting measure, and added it has been informed that its stock may be delisted from the Nasdaq National Market.
Snowball said it was notified by the Nasdaq Tuesday its common stock may be delisted from the market for failing to comply with a rule requiring a minimum bid price of $1 a share. Under that rule, Snowball’s stock could be delisted if it failed to trade at, or above, $1 for 30 consecutive days and if in the 90 days that followed it failed to trade at the $1 level for 10 days straight. The issue, which has ranged as high as $21 in the past 52 weeks, closed at Tuesday at 49 cents, up 12 cents.
Mark Jung, chief executive officer of Brisbane, Calif.-based Snowball, said in a statement that the portal, which offers commerce, content, and community to teens and young adults, was committed to paring its operating loss “to achieve break-even cash flow by the end of 2001.”
Continuing weakness in online advertising prompted Snowball to make the layoffs, Jung noted, “to reduce our expenses to bring them in line with our revenue expectations.” In January, Snowball, whose properties include chickclick.com, ign.com, and highschoolalumni.com, made news when it implemented a broad-based cost cutting plan to accelerate its path to profit. Those moves included layoffs of about 20 percent of the company’s staff at that time, plus cutbacks in marketing.
For the year ended Dec. 31, 2000, Snowball’s loss widened 86 percent to $65 million, despite a threefold increase in sales to $21 million from $6.7 million.