Humbled by losses, Glazers quietly zap online venture
© St. Petersburg Times, published February 16, 2001
"Now we intend to be on the cutting edge of the Internet. Our goal is to rapidly acquire and consolidate the Internet's leading content and electronic commerce Web sites, areas that we believe will be dominated by a handful of large companies."
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Bold talk that now sounds like laughable whimsy. But the remark was made back in the spring of '98, when the Internet seemingly promised unlimited possibilities and the Glazer-controlled company known as Zapata Corp. thought it could be one of the big boys on the digital playground.
To feed the fantasy, the Glazers created Zap.com, a Web site business that was majority-owned by Malcolm Glazer-controlled Zapata Corp. Zap.com ran ads that read "Zapata Will Buy Your Web Site" or "Your Web Site May Be Worth Millions!" The company bought a few sites. And it promised to buy many more, but later abandoned those deals and reneged on 31 letters of intent.
Zap.com even made an unsolicited $1.68-billion offer in 1998 to buy the much bigger Excite portal company. Not only was the bid (faxed unsolicited to Excite) soundly rejected, but the utter absurdity of the proposed deal turned "Zap.com" into a punch line for a slew of Internet jokes.
None of that stopped Zapata from spinning off Zap.com into a public company. The stock soared -- as all Internet IPOs seemed to do back then -- and the Glazers sold off portions of their stakes for hefty profits. In the past year, Zap.com shares traded as high as $10.50. Its last recorded trade this week: 351/2 cents.
Now the Glazer's pursuit of building an Internet kingdom is apparently over. Zapata, a company whose main holdings are fish oil and meat product businesses, quietly is shutting down Zap.com.
Zap.com and an affiliated Web business accounted for almost $5.7-million in net losses for the first nine months of last year. Zapata plans to record a one-time charge of as much as $3.2-million to cover the discontinued operations.
Nobody said conquering the Internet (especially after the tech meltdown of 2000) was as easy as making sausage casings or riding the remarkable growth in value of a National Football League franchise.
Too bad the Glazer stake in the Bucs and the rest of their Byzantine business holdings are not part of Zapata Corp. (Too bad Malcolm's 14,000-square-foot beachfront home in Palm Beach, on the market last year for $19.95-million, isn't either.) Shareholders have watched Zapata shares plummet for the past year.
To make Zapata's stock look more vigorous (and avoid any chance of delisting from the New York Stock Exchange), the Glazers did a 1-10 reverse stock split late last month. That means Zapata's stock, which was trading under $2 a share, now trades in the far more respectable range of $19 and change.
Amazing what a little corporate hocus-pocus can do.
In Spanish, Zapata means "shoe." Maybe that's why shareholders feel like the Glazers walked all over them.
First Union Corp. this week said it was digging even deeper to cut corporate costs. But the truth is First Union has long promoted a skinflint culture. Pinching pennies has been a point of (painful) pride with First Union employees for years. This week, First Union said it is freezing the salaries of top managers and already trimmed such companywide perks as travel and free coffee. Now, if only customers would stop demanding interest on their CDs. ... The operator of Tampa Bay-founded Hops Restaurants, Georgia-based Avado Brands, is trying to persuade the Nasdaq not to delist the company's stock from the Nasdaq SmallCap Market because its stock has not met a $1 minimum bid requirement. The stock was originally slated to be delisted Jan. 31, but was trading Thursday at 59 cents. ...
Fed up with folks making off with their grocery carts, Publix Super Markets is testing new technology that will make it tougher to abscond with the $80-plus carts. At a store in Miami Beach and one in Atlanta, Publix is testing a new anti-theft system based on a cable buried around the perimeter of each property. Grocery cart wheels automatically lock up if a customer tries to cross the invisible fence. What's next? Departing shoppers who can't cross the fence without a purchase?
PODS, the company behind those portable storage units sitting in front of so many Tampa Bay area homes, is looking to raise as much as $10-million in a debenture offering. Does this mean St. Petersburg-based PODS (Portable On Demand Storage) Inc. is talking about going public? Nope. But it does want to expand. Given Florida's public education predicament, maybe PODS should consider an additional line of work: Portable On Demand Schools. ...
Ready to become a virtual party animal? A Fort Lauderdale-based entertainment business called Magicinc.com says it wants open a series of regional Cybars.com that will let folks (for a fee) log on at home and see what's happening at various area nightclubs via live cameras. After hitting the South Florida club scene, Magicinc.com says it's heading to Orlando, Jacksonville and -- hold on to your hard drives -- Tampa Bay.
- Contact Robert Trigaux at email@example.com or (727) 893-8405.
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