Shares of Quokka Sports fell 21% Monday after the
company said that it sold $76M worth of convertible debt at
a conversion price "less than the closing price of its
shares last week," according to Carl Corry of CBS
MarketWatch. Shares of Quokka closed Monday at $5.94, down
19.8% from Friday's close of $7.41. Quokka CFO Les Schmidt
said that the cash raised in the deal is more than the $50-
55M the company "needs to turn a profit" by 2002. GE
Capital led the round of the new funding. New investors
also received warrants to purchase about 2.8 million shares
of Quokka Sports at an exercise price of $8.00. Corry wrote
that since Quokka's shares closed at $7.41 on Friday, the
deal "raised concerns about the value the market had placed
on the company, as well as diluting the value of shares held
by existing stakeholders." Schmidt: "The perception that
$5.41 is what the stock price is worth is simply erroneous.
... We are building a leading edge media company and that
can take time" (CBS MarketWatch, 9/18). Meanwhile, Quokka
also announced that it will provide sports programming for
DirecTV's interactive TV platform, which DirecTV is
developing with Microsoft (Upside Today, 9/18).
AT PRESSTIME: Shares of Quokka were down 8.4% in early
trading this morning to $5.44 (THE DAILY).
