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News
eToys has two months left
January 25, 2001: 7:14 p.m. ET

Toy retailer will run out of cash by March 31 without 'substantial capital'
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NEW YORK (CNNfn) - eToys Inc. will need a savior if it is to survive past March.

The online toy retailer said Thursday it probably has enough cash and cash equivalents to last until March 31, but after that it will require "an additional, substantial capital infusion."

Los Angeles-based eToys also announced fiscal third-quarter losses which were more substantial than Wall Street analysts had expected.

The company lost $74.5 million, or 52 cents per share, compared with losses of $62.5 million, or 52 cents per share, for the year-ago period. Analysts polled by First Call expected a loss of 46 cents per share.

Revenue for the quarter rose 23 percent to $131.2 million.

graphicThe holidays were not kind to eToys. In December the company warned its third-quarter operating loss would be wider than expected due to sluggish holiday sales and other factors. The news sent the stock, which hit a high of $61.50 the winter before, below $1.

On Jan. 4 the company announced it would slash 700 jobs, 70 percent of its work force, in an effort to save money. eToys shares got a boost two weeks later amidst market rumors the struggling company was close to finding a buyer.

But no buyer has emerged and the company now says there "can be no assurance that additional capital will be available to the company on acceptable terms, or at all."

eToys is still working with Goldman Sachs to explore any options left.

Shares of eToys (ETYS: Research, Estimates) fell 3 cents to close at 31 cents Thursday. graphic





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