NEW YORK — Silicon Valley entrepreneur Jim Clark on Friday said he would pump more money into his "new new thing"--Healtheon/WebMD Corp.--prompting a surge in the share price of the beleaguered Internet-based health services network.
Clark, the billionaire who was profiled in Michael Lewis' recent book "The New New Thing," will buy up to $220 million of the company's stock with fellow Healtheon director John Doerr. Analysts view the investment as a strong vote of confidence in Healtheon, whose share price has withered since the beginning of the year after a series of proposed acquisitions by the company.
Healtheon, which aims to become a Web-based link between doctors, patients, drug companies and insurers, also said first-quarter revenue nearly doubled from the previous quarter to more than $62 million but it will report a deeper-than-expected loss.
Even so, the stock rose sharply after the news of the investment, climbing $7.50 to close at $29.19 in heavy Nasdaq trading. The stock, which has shed about 43% since the beginning of the year, hit a 52-week low of $15.63 earlier this week.
Clark, who also co-founded Netscape Communications, said he wanted to increase his investment in the company "by up to $200 million," and Doerr said he expects to invest up to $20 million.
"I am more confident than ever in Healtheon/WebMD's vision of connecting physicians, payers and consumers via the Internet," Clark said.
Healtheon said it approved the stock buys and there were no restrictions on them.
The company forecast a loss of nearly $90 million for the first quarter, deeper than the consensus estimate of $72 million to $74 million.
Healtheon's revenue estimate is in line with expectations, said Stephen DeNelsky, an analyst with Credit Suisse First Boston.