http://www.linux-mag.com/2000-01/venture_01.html
Linux Magazine / January 2000 / FEATURES
Take The Money and Run (Reliably)
Venture Capital Prospecting in Open Source's Wild Frontier
by Wendy Goldman Rohm
(extract)
Fishing for the Big One
|
| The VCs all want to hear a big story. They want to hear about paradigm shifts, and about how you're going to be the next Netscape -- all without ever understanding a single word you've told them. .....Paul Vixie, Vixie Enterprises |
This gold-rush activity is proving to be a boon for some CEOs seeking funding for their open source efforts and a bust for others. For sure, taking on a VC can be a double-edged sword. After all, in exchange for their money, companies often have to offer board seats and give up control of their management team.
Paul Vixie, CEO of Vixie Enterprises, says his company has had better experiences with individual investors than with venture capitalists. "The VCs all want to hear a big story," he said. "They want to hear about paradigm shifts and about how you're going to be the next Netscape or Microsoft. Then they want to replace your management team and want an exclusive on subsequent funding rounds. And they want to bring in their cronies as managers and co-investors -- all without ever understanding a single word you've told them except 'we're going to be bigger than Netscape.'"
Vixie says venture capitalists have their place only after a company is large enough to manage the relationship with them. "Every single VC I've ever talked to wants to be more than just money, but only one so far actually has anything to offer except money."
Thus far, Vixie has relied on private investors and handouts from big vendors like DEC and Sun to support the development of BIND (Berkeley Internet Name Domain), the software used by almost every server on the Internet to translate URLs into IP addresses.
Of course not all companies are eager to rush into the arms of venture capitalists, especially companies deeply rooted in the open source ethos. A number of open source companies, including Vixie's MIBH and Sendmail, Inc. have secured so-called "angel" investment instead. This kind of investment generally comes in a much more hands-off manner than that of the venture capitalists.
"We went in search of management and money separately," said Vixie. "We'd hoped to find [them both] by talking to top VCs," he said, "In both cases we found what we needed among the community of people who were already involved in our industry."
FOR IMMEDIATE RELEASE
Deployment of Global Optical IP Network Accelerates,
Providing Scaleable Multi-Gigabit Internet Connectivity
New York, January 19, 2000 - Metromedia Fiber Network, Inc. (NASDAQ: MFNX), the leader in deployment of optical networking and Internet infrastructure within key metropolitan areas worldwide, has acquired M.I.B.H. Inc., a network outsourcing provider offering full-service management of business Internet connectivity solutions, for approximately $51 million in cash and Metromedia Fiber Network Class A Common Stock. The acquisition will enable Metromedia Fiber Network to accelerate the timeline for design and deployment of its global optical IP network. Under the terms of the agreement, MIBH will become a wholly-owned subsidiary of Metromedia Fiber Network. All of MIBH's professional employees, including its President, Paul Vixie, and its Chief Technology Officer, Stephen Stuart, will join Metromedia Fiber Network.
"The acquisition of MIBH, and the addition of Paul Vixie and Stephen Stuart to the management team, coupled with our acquisition last year of AboveNet Communications, has given Metromedia Fiber Network industry-leading IP expertise," said Nick Tanzi, President of Metromedia Fiber Network. "We have accelerated deployment of the industry's first end-to-end global optical IP network to meet the growing demand for high-capacity bandwidth for mission-critical and broadband applications. This fully optical network will allow us, for example, to deliver business content in real time from an office in New York to one in San Jose and another in London, or to deliver content-rich multimedia to millions of users simultaneously around the world."
Mr. Vixie will become the Senior Vice President for Network Services for Metromedia Fiber Network and AboveNet and Chief Technology Officer for PAIX, a subsidiary of Metromedia Fiber Network. He is one of the founders of Internet Software Consortium (ISC) and is known for ISC's work with BIND, the Domain Name Server (DNS) software that is at the core of the Internet and has been in use since its inception. Mr. Vixie is a founder of PAIX and has served as its consulting chief technology officer since PAIX's acquisition by AboveNet and Metromedia Fiber Network in 1999. Mr. Vixie will report directly to Dave Rand, Metromedia Fiber Network's Chief Technology Officer.
Mr. Stuart will become the Vice President of Internet Architecture for Metromedia Fiber Network and AboveNet. He spent over 12 years as a researcher for Digital Equipment Corporation where he was a founder of PAIX with Mr. Vixie. Mr. Stuart has been actively involved in many of the technologies and organizations that have become integral to the Internet, including IPv6, wireless networking, multicasting and NANOG (North American Network Operators Group). Mr. Stuart will report directly to Mr. Vixie.
The employees of MIBH are recognized as experts in the field of IP networking. Several members of the MIBH team have more than twenty years of experience building networks, and most of the staff has been involved in the design and deployment of the Internet for more than 10 years. MIBH staff members have also aided in the development of some of the leading networks in use today, including those of Sprint, UUNET and Verio. Additional members of the MIBH staff who will be joining AboveNet include Tom Patterson, Joseph Malcolm, Andrew Partan, Brett Watson, David Hankins, Brad Horak and Hank Kilmer.
"Joining MFN will allow us to participate in the creation of one of the most exciting networks of the future," Mr. Vixie said. "AboveNet already has a reputation for delivering the best network performance and reliability on the Internet. We are privileged to be a part of this team and look forward to the challenge of designing and deploying the first global, end-to-end optical IP network."
About Metromedia Fiber Network
Metromedia Fiber Network, the leading provider of optical networking and Internet infrastructure, is revolutionizing the fiber optic industry. By offering virtually unlimited, unmetered bandwidth at a fixed cost within key metropolitan areas, the Company is eliminating the bandwidth barrier and redefining the way broadband capacity is sold. Metromedia Fiber Network is extending metropolitan optical networking infrastructure to the end user in strategic top-tier markets, enabling its customers to implement the latest data, video, Internet and multimedia applications. In addition to its current expansion in 51 cities in North America, Metromedia Fiber Network is establishing an international presence with planned fiber optic network builds in 16 cities throughout Europe.
Together with its subsidiaries, AboveNet Communications, Inc., a leading provider of co-location and Internet connectivity solutions, and PAIX.net, Inc., the leading neutral Internet Exchange, Metromedia Fiber Network is unleashing the full potential of the Internet. The combined company facilitates the explosive growth of e-commerce and advanced Internet applications by delivering secure, reliable and scalable optical networks and IP services to Internet content and service providers, carriers and enterprise users worldwide. For more information about Metromedia Fiber Network, please visit the company's Web site at www.mmfn.com.
This news release contains certain forward-looking statements that involve risks and uncertainties. Factors that could cause or contribute to such risks and uncertainties include, but are not limited to, general economic and business conditions, competition, changes in technology and methods of marketing, and various other factors beyond the Company's control. This also includes such factors as described from time to time in the SEC reports filed by Metromedia Fiber Network, including the most recently filed Forms 10-K, 10-Q and S-4.
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Contacts:
| |
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Media Relations Gary J. Gatyas, Jr. Gibbs & Soell, Inc. 212-697-2600 ggatyas@gibbs-soell.com |
Investor Relations Susan Moreno Metromedia Fiber Network 212-606-4389 smoreno@metromediacompany.com |
http://www.sec.gov/Archives/edgar/data/1043533/000091205701505707/a2042187z10-k405.txt
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(MARK ONE)
|X| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000
OR
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NUMBER 000-23269
--------------------------------
METROMEDIA FIBER NETWORK, INC.
(Exact name of registrant, as specified in its charter)
--------------------------------
DELAWARE 11-3168327
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
--------------------------------
C/O METROMEDIA FIBER NETWORK SERVICES, INC.
360 HAMILTON AVENUE
WHITE PLAINS, NY 10601
(Address and zip code of principal executive offices)
(914) 421-6700
(Registrant's telephone number, include area code)
--------------------------------
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
None
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
Class A Common Stock, par value $.01 per share
--------------------------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes |X| No |_|
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K. |X|
The aggregate market value of voting stock and non-voting common equity of
the registrant held by nonaffiliates of the registrant was approximately
$3,130,820,819 as of March 19, 2001 based on the last reported bid quotation on
the Nasdaq National Market as of that date. The number of shares of Class A
Common Stock outstanding as of March 19, 2001 was 541,191,800 The number of
shares of Class B Common Stock outstanding as of March 19, 2001 was 67,538,544.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Definitive Proxy Statement to be used in connection with
the Registrant's 2000 Annual Meeting of Stockholders, to be held on May 11,
2000, are incorporated by reference into Part III of this Annual Report on Form
10-K.
METROMEDIA FIBER NETWORK, INC. & SUBSIDIARIES
ANNUAL REPORT ON FORM 10-K
FOR THE YEAR ENDED DECEMBER 31, 2000
(extract)
NOTE 2: BUSINESS ACQUISITIONS
All acquisitions have been accounted for under the purchase method. The
results of operations of the acquired businesses are included in the
consolidated financial statements from the dates of acquisition.
(extract)
In February 2000, the Company purchased the remaining 60% of its 40%
owned joint venture in the United Kingdom, AboveNet UK Limited, for shares of
the Company's stock with a market value of $10 million. The excess of
purchase price over the fair values of net assets acquired was approximately
$10.4 million and has been recorded as goodwill.
On January 19, 2000, the Company completed the acquisition of MIBH
Inc., a network outsourcing provider offering full-service management of
business Internet connectivity solutions for approximately $52.3 million in cash
and stock. The excess of purchase price over the fair values of net assets
acquired was approximately $51.8 million and has been recorded as goodwill.
Under the terms of the agreement, MIBH became a wholly owned subsidiary
of Metromedia Fiber Network, Inc., and has subsequently merged into Metromedia
Fiber Network Services, Inc. The shareholders of MIBH, a privately held company,
received an aggregate of 1,884,418 shares of Metromedia Fiber Network class A
common stock having a fair market value of approximately $49.3 million and $3.0
million in cash.
(The names of correspondents were blanked out for privacy reasons)
THEY DIDN'T EVEN TRY TO MAKE IT LOOK LIKE A REAL COMPANY
Date: Thu, 24 May 2001 01:30:29 -0400 (EDT) From: xxx@xxxxxxxx.net To: xxxxx@xxxxxxx.net Subject: Re: Stealth Blocking On Thu, 24 May 2001, xxxxxxxxxxx wrote: > Well, I didn't invent the theory, and my belief is that those people > are simply backing him to further their own interests. As you know, > MFNX proved to be a poor investment for any stockholder this year. > They paid $51M for M.I.B.H. What did they really buy? It was all a long-planned and fake "purchase", and MIBH was a fake company. Vixie and Rand have been buddies forever, but I think their involvement in the RBL is purely cooincidental. ABOV was Rand's baby, he was the one who convinced MFNX they needed to buy ABOV in order to use their fiber infrastructure and capitol. Rand told Vixie to put together a company with about 10 good people for the plans of being bought out by MFN and making them all money. Hence the men in black helicoptors thing, they didn't even try to make it look like a real company. The MIBH guys picked up a bunch of money, then came in and cleaned house at ABOV. Rand took over at MFNX, and let Vixie handle operations of ABOV. Let me tell you Vixie is one of the worst people to work for, I left after less then a month of working directly under him. He's a massive fucking dick. MFNX is still a solid investment, just suffering through the same stock market mess as everyone else. I picked up quite a bit at $3.80 and I know eventually I will be rewarded. :P -- xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
http://www.sec.gov/Archives/edgar/data/1043533/000095014202000496/form8k52002.txt
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (date of earliest event reported): May 20, 2002
METROMEDIA FIBER NETWORK, INC.
-------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 000-23269 11-3168327
---------- ----------- -----------
(State or other jurisdiction of (Commission File (IRS Employer
incorporation) Number) Identification No.)
C/O METROMEDIA FIBER NETWORK SERVICES, INC.
360 HAMILTON AVENUE,
WHITE PLAINS, NEW YORK 10601
------------------------------------------- ------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (914) 421-6700
----------------
NOT APPLICABLE
-------------------------------------------------------------------------------
(Former name or former address, if changed since last report)
===============================================================================
ITEM 3. BANKRUPTCY OR RECEIVERSHIP
On May 20, 2002, Metromedia Fiber Network, Inc. (the "Company") and
most of its domestic subsidiaries (each, a "Debtor" and collectively with the
Company, the "Debtors") filed voluntary petitions for reorganization under
Chapter 11 of the United States Bankruptcy Code (the "Bankruptcy Code") with the
United States Bankruptcy Court for the Southern District of New York (the
"Bankruptcy Court"). The Debtors remain in possession of their assets and
properties, and continue to operate their businesses and manage their properties
as debtors-in-possession under the jurisdiction of the Bankruptcy Court and in
accordance with the applicable provisions of the Bankruptcy Code.
Further details of the filing are included in the press release
attached as Exhibit 99.1 to this report, which is incorporated by reference into
this Item.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
The press release of the registrant is attached as Exhibit 99.1 to this
report.
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
METROMEDIA FIBER NETWORK, INC.
By: /s/ Robert J. Sokota
--------------------------
Name: Robert J. Sokota
Title: Senior Vice President and
General Counsel
Date: May 20, 2002
EXHIBIT INDEX
-------------
EXHIBIT
NO. DOCUMENT
----- --------
99.1 Press Release dated May 20, 2002
http://www.sec.gov/Archives/edgar/data/1043533/000095014202000496/ex991form8k52002.txt
[GRAPHIC OMITTED]
LOGO - MFN EXHIBIT 99.1
NEWS RELEASE
--------------------------------------------------------------------------------
Corporate Headquarters 360 Hamilton Avenue White Plains, NY 10601
914.421.6700 www.mfn.com
FOR IMMEDIATE RELEASE
METROMEDIA FIBER NETWORK, INC. TO REORGANIZE
THROUGH A VOLUNTARY CHAPTER 11 FILING
COMPANY TO CONTINUE OPERATIONS AND REDUCE EXPENSES
RETAINS IMPALA PARTNERS AND UBS WARBURG AS ADVISORS
NEW YORK, MAY 20, 2002 - Metromedia Fiber Network, Inc. (MFN)
(Nasdaq:MFNXE) announced today that it and most of its domestic subsidiaries
have filed voluntary petitions for reorganization under Chapter 11 of the United
States Bankruptcy Code. The Company will continue to operate without
interruption.
In conjunction with the filing, MFN has reached an agreement
with its senior secured lenders which will enable the Company to fund its
operations while it implements its plan to become cash flow positive. The plan
includes significant cost reductions through a substantial deleveraging of the
Company's balance sheet, the disposal of non-productive properties (including
idle data centers or non-essential offices), rejection of burdensome vendor
contracts and reduction of personnel. By shedding expenses and focusing on the
Company's highest margin operations, MFN expects to quickly stabilize its
financial status.
"First and foremost, I want to assure our customers that our
top-notch service levels will not be compromised by the reorganization process,"
said John Gerdelman, president and chief executive officer of Metromedia Fiber
Network. "Dedication to our customers and their businesses continues as a top
priority."
"We believe that our core metro-fiber and data center
businesses are some of the best assets in the telecommunications industry.
However, in growing the business we, along with others in the industry,
out-paced the demand and, as a result, are overbuilt. We are committed to taking
the painful but necessary steps to ensure stability and long term success for
our company. Our objective is to move through Chapter 11 expeditiously and have
the "New MFN" emerge with a sound capital structure and operational base, fully
positioned to take advantage of market opportunities."
- MORE -
- 2-
Metromedia Fiber Network Government Services, Inc. was not one
the subsidiaries included in this filing and will continue to operate outside of
the Chapter 11 proceeding. MFN also announced that it has hired Impala Partners
to assist in the restructuring and UBS Warburg to advise on strategic
alternatives.
Finally, MFN announced that it had been notified by The Nasdaq
Stock Market that as a result of not meeting certain listing criteria, the
Company's securities would be delisted effective with the open of business on
May 20, 2002.
ABOUT METROMEDIA FIBER NETWORK
------------------------------
MFN is the leading provider of digital communications infrastructure solutions.
The Company combines the most extensive metropolitan area fiber network with a
global optical IP network, state-of-the-art data centers, award-winning managed
services and extensive peering relationships to deliver fully integrated,
outsourced communications solutions to Global 2000 companies. The all-fiber
infrastructure enables MFN customers to share vast amounts of information
internally and externally over private networks and a global IP backbone,
creating collaborative businesses that communicate at the speed of light.
Customers can take advantage of MFN's complete, end-to-end solution or select
individual components to complement their existing infrastructures. By leasing
MFN's metropolitan and regional fiber, customers can create their own, private
optical network with virtually unlimited, un-metered bandwidth at a fixed fee.
For more reliable, secure and high-performance Internet connectivity, customers
can use MFN's private IP network to communicate globally without ever touching
the public-switched network. Moreover, MFN's comprehensive managed services
enable companies to create a world-class Internet presence, optimize complex
sites and private optical networks, and transform legacy applications, all with
a single point of contact.
PAIX.net, Inc., a subsidiary of MFN and the original neutral Internet exchange,
offers secure, Class A co-location facilities where ISPs and other
Internet-centric companies can form public and private peering relationships
with each other, and have access to multiple telecommunications carriers for
circuits within each facility. One network. One infrastructure. One source.
For more information on MFN, please visit our Web site at www.mfn.com
THIS RELEASE CONTAINS FORWARD-LOOKING STATEMENTS PURSUANT TO THE SAFE HARBOR
PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. THESE
STATEMENTS INVOLVE RISKS AND UNCERTAINTIES, INCLUDING THE IMPLEMENTATION OF THE
PROPOSED RESTRUCTURING AND BANKRUPTCY COURT APPROVAL, AND THE RISKS DETAILED
FROM TIME TO TIME IN THE COMPANY'S FILINGS WITH THE SECURITIES AND EXCHANGE
COMMISSION. FURTHER INFORMATION ON FACTORS THAT COULD AFFECT THE COMPANY'S
FINANCIAL AND OTHER RESULTS IS INCLUDED IN THE COMPANY'S FORMS 10-Q AND 10-K,
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.
MEDIA RELATIONS: INVESTOR RELATIONS:
Kara Carbone Marty Cohen
Metromedia Fiber Network, Inc 212-606-4389
914-683-6386
kara.carbone@mfn.com
http://www.sec.gov/Archives/edgar/data/1043533/000095014202000608/ex991frm8k61102.txt
EXHIBIT 99.1
------------
[GRAPHIC OMITTED]
LOGO - MFN
NEWS RELEASE
--------------------------------------------------------------------------------
Corporate Headquarters 360 Hamilton Avenue White Plains, NY 10601
914.421.6700 www.mfn.com
FOR IMMEDIATE RELEASE
METROMEDIA FIBER NETWORK, INC.
ANNOUNCES SEC INVESTIGATION
NEW YORK, JUNE 13, 2002 - Metromedia Fiber Network, Inc.
announced today that it has been advised that the staff of the Securities and
Exchange Commission (the "SEC") has commenced a formal investigation into the
company's past accounting practices that led to the previously announced
expected restatement of the company's operating results for each of the
quarterly periods included in the fiscal year ended December 31, 2001. As
previously announced, the expected restatements involve revenue/sales credit
recognition, timing of expense recognition and non-cash lease accounting and
purchase accounting issues. The company has cooperated fully with the SEC in the
investigation, and will continue to do so.
ABOUT METROMEDIA FIBER NETWORK
------------------------------
MFN is the leading provider of digital communications infrastructure solutions.
The Company combines the most extensive metropolitan area fiber network with a
global optical IP network, state-of-the-art data centers, award-winning managed
services and extensive peering relationships to deliver fully integrated,
outsourced communications solutions to Global 2000 companies. The all-fiber
infrastructure enables MFN customers to share vast amounts of information
internally and externally over private networks and a global IP backbone,
creating collaborative businesses that communicate at the speed of light.
Customers can take advantage of MFN's complete, end-to-end solution or select
individual components to complement their existing infrastructures. By leasing
MFN's metropolitan and regional fiber, customers can create their own, private
optical network with virtually unlimited, un-metered bandwidth at a fixed fee.
For more reliable, secure and high-performance Internet connectivity, customers
can use MFN's private IP network to communicate globally without ever touching
the public-switched network. Moreover, MFN's comprehensive managed services
enable companies to create a world-class Internet presence, optimize complex
sites and private optical networks, and transform legacy applications, all with
a single point of contact.
PAIX.net, Inc., a subsidiary of MFN and the original neutral Internet exchange,
offers secure, Class A co-location facilities where ISPs and other
Internet-centric companies can form public and private peering relationships
with each other, and have access to multiple telecommunications carriers for
circuits within each facility.
On May 20, 2002, Metromedia Fiber Network, Inc. and most of its domestic
subsidiaries commenced voluntary Chapter 11 cases in the United States
Bankruptcy Court for the Southern District of New York.
One network. One infrastructure. One source.
For more information on MFN, please visit our Web site at www.mfn.com
-----------
THIS RELEASE CONTAINS FORWARD-LOOKING STATEMENTS PURSUANT TO THE SAFE HARBOR
PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. THESE
STATEMENTS INVOLVE RISKS AND UNCERTAINTIES, INCLUDING THE IMPLEMENTATION OF THE
PROPOSED RESTRUCTURING AND BANKRUPTCY COURT APPROVAL, AND THE RISKS DETAILED
FROM TIME TO TIME IN THE COMPANY'S FILINGS WITH THE SECURITIES AND EXCHANGE
COMMISSION. FURTHER INFORMATION ON FACTORS THAT COULD AFFECT THE COMPANY'S
FINANCIAL AND OTHER RESULTS IS INCLUDED IN THE COMPANY'S FORMS 10-Q, 10-K AND
S-3, FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.
MEDIA RELATIONS: INVESTOR RELATIONS:
Kara Carbone Marty Cohen
Metromedia Fiber Network, Inc 212-606-4389
914-683-6386
kara.carbone@mfn.com
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