Internet Capital Group

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Actua Corporation
IndustryBusiness-to-business
FoundedMarch 4, 1996 (1996-03-04)
FounderKen Fox
Buck Buckley
DefunctApril 18, 2018 (2018-04-18)
FateUnderwent liquidation
HeadquartersRadnor, Pennsylvania

Actua Corporation was a venture capital firm. During the dot com bubble, the company had a market capitalization of over $50 billion. The company was originally known as Internet Capital Group, Inc. and changed its name to Actua Corporation in September 2014. In April 2018, the company underwent liquidation.[1]

History

Incubator

In March 1996, Ken Fox, director of West Coast operations at Safeguard Scientifics, and Buck Buckley, a former vice president of acquisitions for Safeguard Scientifics, formed Internet Capital Group (ICG), a venture capital firm focused on business-to-business e-commerce.[2] Fox saw the opportunity as "the biggest wealth-creation opportunity the world has ever seen".[3] Following the "keiretsu" model used by Safeguard Scientifics, the company was heavily involved in the operations of the companies in which it invested and the start-ups would do business with each other.[2][4]

One of ICG's first investments was a website called Water Online. Under the guidance of ICG, in late 1997, Water Online hired Mark Walsh, head of AOL's B2B division, as CEO. The company changed its name to VerticalNet, expanded, and became a public company, albeit with limited revenue.[5] Unlike traditional venture capitalists, Buckley and Fox envisioned that ICG would hold most of its investments for ten years or longer.[2]

In February 1999, the company converted to a C corporation.[6] In May 1999, it raised $90 million of funding via a convertible bond issue.[7]

In August 1999, the company became a public company via an initial public offering,[8] offering 14.9 million shares at $12 each; shares doubled in value in their first day of trading.[9] IBM bought 3.75 million shares at the IPO price of $12 per share[10] and Dell Computer bought 1 million shares.[11] Safeguard Scientifics was the largest shareholder. At the time of the IPO, ICG held stakes in 35 companies.[9] At the end of its first month as a public company, boosted with buy recommendations from Henry Blodget, the stock traded at $58/share.[12]

By December 1999, the stock was trading at over $200 per share, making Buckley and Fox billionaires on paper.[13][14] The company was valued at nearly $60 billion, making it the 3rd largest Internet company by market capitalization behind AOL and Yahoo!. By then, the company had invested $300 million in 39 start-ups and had a staff of 29 people to manage and advise those companies.[3] In the fourth quarter of 1999, GE Capital sold its shares in the company.[15] In December 1999, the company raised over $1 billion in additional capital.[16] That month, the company established a European operation, with an office in London.[17] With a gain of 2733%, the stock was the best performing initial public offering of 1999.[18]

By February 2000, the stock had declined 41% from its peak.[19] That month, the company said it expects to see losses for the "foreseeable future".[20] By early 2000, the company had invested $1.4 billion in 61 start-up firms.[21] By April 2000, during the bursting of the dot-com bubble, its stock was trading at $35/share.[22] In May 2000, the company invested $35 million to form an online patent exchange with IBM.[23] Losses accelerated that year.[24] By October 2000, the stock was trading at $9/share.[25] In November 2000, the company announced plans to cut its staff by 35% and take a charge of $25 million to $30 million. It cut back its investments in Q3 2000 to $120 million, from $417 million in the previous quarter.[26] By December 2000, the company had investments in 80 companies, all of which were involved in business-to-business Internet services.[27]

In October 2001, after the September 11 attacks, the stock traded for 51 cents per share.[28]

Two years after its peak in March 2000, the company had a market capitalization of $200 million, down 99.5%.[29]

Liquidation

In February 2013, the company sold its stake in Channel Intelligence to Google for $60 million in proceeds.[30] In December 2013, the company sold Procurian to Accenture for $375 million.[31]

In September 2014, when the company changed its name to Actua Corporation, its stock was trading around $20 per share and was worth approximately $700 million.[29][32]

In October 2016, the company sold Govdelivery to Vista Equity Partners for $153 million.[33] In December 2017, the company sold its interests in VelocityEHS and Bolt Solutions for $328 million.[34]

In January 2018, the company sold FolioDynamix for net proceeds of $166.3 million.[35] In April 2018, the company underwent liquidation.[1]

References

  1. "Actua 8-K". U.S. Securities and Exchange Commission. April 18, 2018.
  2. "ICG: A Former High Flyer Focuses Now on Restructuring". Wharton School. December 20, 2000.
  3. Barrett, Amy (November 1, 1999). "Internet Capital's Young Turks". Bloomberg News.
  4. "The A to Z of B2B". The Economist. March 30, 2000.
  5. Angwin, Julia (April 7, 2000). "Online Exchanges Suffer From Too Many Players". The Wall Street Journal.
  6. "INTERNET CAPITAL GROUP, INC. 5% Senior Convertible Notes due 2009". United States Securities and Exchange Commission.
  7. "INTERNET CAPITAL GROUP, INC. Form 10-Q". United States Securities and Exchange Commission.
  8. "Incubators On Life Support: ICG". Forbes. January 19, 2001.
  9. "IPO Roundup: Internet Capital Group flies in debut, Mission Critical also gains". CNET. August 5, 1999.
  10. "IBM Invests $45m in Investment Firm Internet Capital". TechMonitor. August 8, 1999.
  11. McWilliams, Gary (August 26, 1999). "Dell Computer's CEO Bets His Own Cash on the Web". The Wall Street Journal.
  12. "Merrill's bull fires up Internet Capital Group". MarketWatch. August 30, 1999.
  13. Simon, Ruth (January 29, 2001). "1. IPOs Will Make You Rich". The Wall Street Journal.
  14. TEDESCHI, BOB (May 7, 2000). "How Killer B-to-B's Slid to the Endangered List". The New York Times.
  15. "Internet stocks power earnings at General Electric". MarketWatch. April 1, 2000.
  16. "Internet Capital Group Announces Massive Stock and Debt Offerings". The Wall Street Journal. December 16, 1999.
  17. Meikle, Brad (December 1, 1999). "People Moves: Internet Capital Group recruits Apax executives". Buyouts Insider.
  18. "1999's top-performing IPOs". MarketWatch. March 23, 2000.
  19. "Venture Catalyst Is Attracting Attention". Los Angeles Times. February 8, 2000.
  20. "Internet Capital Group shares drop on loss forecast". MarketWatch. February 25, 2000.
  21. Barrett, Amy (May 15, 2000). "Walter Buckley III". Bloomberg News.
  22. Shabelman, David (April 17, 2000). "Tech Sector Slips as Market Seesaws". TheStreet.com.
  23. "Internet Capital Group, IBM forming online patent exchange". MarketWatch. May 24, 2000.
  24. Bousquin, Joe (August 10, 2000). "Internet Capital Group Reports Wider Loss". TheStreet.com.
  25. "Investors see nothing hatching at Net incubators". CNET. October 19, 2000.
  26. "The $1.7 trillion dot-com lesson". CNN. November 16, 2000.
  27. "ICG refocuses vision amid sour markets". CNET. December 16, 2000.
  28. "Nasdaq's Penny Stocks". Forbes. October 5, 2001.
  29. DiStefano, Joseph N. (September 6, 2014). "Actua: New name for a company with fresh hopes". The Philadelphia Inquirer.
  30. Lundgren, Ingrid (February 6, 2013). "Google Acquires Channel Intelligence for $125 Million". TechCrunch.
  31. "ICG Group Announces Completion of Sale of Procurian to Accenture for $375 Million" (Press release). Globe Newswire. December 5, 2013.
  32. Hertzler, Lauren (September 3, 2014). "ICG Group Inc. gets new name, brand". American City Business Journals.
  33. "Actua Announces Completion of Sale of GovDelivery to Investor Group Led By Vista Equity Partners for $153 Million in Cash" (Press release). Globe Newswire. October 19, 2016.
  34. "Actua Announces Successful Completion of Sale of VelocityEHS and Bolt Solutions" (Press release). Globe Newswire. December 12, 2017.
  35. "Actua Announces Completion of Sale of FolioDynamix" (Press release). Globe Newswire. January 2, 2018.