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Irvine's LeadersOnline Blames Market for Undoing Stock Sale

September 26, 2000|From Times Staff and Wire Reports

LeadersOnline Inc. in Irvine, an online executive and professional search-and-placement business, said Monday that it is withdrawing its $75-million initial stock sale because of market conditions.

The company "does not believe that the terms available in the public market at this time are sufficiently favorable to warrant proceeding with or completing an initial public offering of the shares," according to a document it filed with the Securities and Exchange Commission.

Executives at the company, which is owned by Heidrick & Struggles International Inc. in Chicago, declined to comment.

The decision came at a time when the market for initial public offerings is heating up, said Tom Madden of IPO Monitor. About 50 companies, a hefty number, are expected to go public within a month, he said.

Even though LeadersOnline is an Internet company, the market for "dot-coms" is by no means dead, he said.

"The hunger for every dot-com that comes down the pike has certainly cooled a little bit, but the real good ones are still drawing a lot of attention," Madden said. "It's not like a dot-com desert out there."

But the Bloomberg IPO Index, which tracks the stock performance of companies that have recently gone public, has fallen more than 39% since its peak on March 10, when technology stocks began a sharp plunge. The index has fallen about 2% in the past two weeks.

As a division of Heidrick, one of the largest executive search firms, LeadersOnline was a drag on consolidated earnings. Last year, it pulled in revenue of $2.6 million but posted a net loss of about $5.2 million.

Headed by Chief Executive Michael T. Christy, LeadersOnline focuses on online recruitment and placement services aimed at companies seeking mid-level executives and professionals.

The company had said in previous SEC documents that it planned to use net proceeds from the IPO to accelerate its global marketing campaign, to continue to enhance its Internet-based technology platform and to cover other general corporate activities.

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