PSINet Inc., the Internet-backbone-service provider that was once a vocal
opponent of federally mandated 'open access' to cable high-speed-data lines,
hired a new president Monday and told investors its stock is 'likely'
worthless.
PSINet shares dropped 56 cents in afternoon trading to 16 cents each. The
stock had traded as high as $59.63 per share in the past 12 months.
PSINet named Harry Hobbs president and chief operating officer, filling a spot
that has been left vacant for more than one year. Hobbs, who replaces Harold
Wills, previously served as executive vice president and divisional president of
PSINet's international operations. Hobbs will report to chairman and CEO William
Schrader.
Schrader was one of the few Internet-service-provider heads against forced
open access of cable, even testifying before Congress in 1999 to voice his
opposition.
PSINet also announced that it has engaged Dresdner Kleinwort Wasserstein as a
financial advisor to explore alternatives to restructuring the company's debt.
Dresdner would work in conjunction with Goldman Sachs & Co., which PSINet
hired last year to identify strategic alternatives, including a sale of the
company.
But in a prepared statement, PSINet said that even if it were to find a
buyer, 'It is likely that the common stock of the company will have no value and
the indebtedness of the company will be worth significantly less than face
value.'
