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Critical Path, Inc. (Nasdaq: CPTH) dropped 3 5/16 to 24 5/8 in the first few minutes of trading Thursday after the company, which provides business-to-business (B2B) Internet messaging services and software, announced a new chief financial officer.
The plunge, amid a general decline in technology stocks, came despite the company's reiteration that it is on track to post a profit in the fourth quarter.
Lawrence P. Reinhold will succeed Mark Rubash, who is leaving his CFO post for personal reasons after taking a leave of absence. Reinhold comes to the company from PricewaterhouseCoopers, where he has served as managing partner for the company's Midwest telecommunications division.
"Our business model and financial controls are working, and we continue to eagerly anticipate Critical Path's turning the corner to profitability in the fourth quarter," said chief executive officer Doug Hickey in a statement announcing Reinhold's appointment.
Last month, Critical Path said it expects fourth-quarter revenue of US$54 million to $56 million, a 22 percent improvement over the third quarter, with a pro forma profit of a penny per share. In the 1999 fourth quarter, the company lost 14 cents per share before extraordinary charges.
"We anticipate continued high demand for our product and service offerings," Hickey said last month. Business is booming across all product lines, he added.
During the third quarter, Critical Path signed more than 240 long-term contracts. Customers and partners include Circuit City, Honeywell and Bechtel. In addition, the company said it sold more "value-added" products, such as directory and calendar services. Hickey believes that Critical Path's comprehensive service offering gives the company "a significant competitive advantage."
Critical Path is also boosting its position in the market for wireless services, as well as adding more international clients.
Yet company shares, which traded as high as 119 1/2 last
March, in November set a 52-week low of 19 3/8.
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