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drkoop future in doubt
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March 31, 2000: 3:28 p.m. ET
Shares slide after auditors question whether online health firm can survive
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NEW YORK (CNNfn) - Facing mounting losses and dwindling cash reserves, health information Web site drkoop.com Inc. faces uncertainty as to whether it can continue as a going concern, according to the firm's auditors.
The assessment from PriceWaterhouseCoopers accountants, contained in the company's annual report filed late Thursday with the Securities and Exchange Commission, triggered a drop of more than 40 percent in drkoop's stock price Friday. The stock, already trading at all-time lows, fell another 2-21/32 to 3-19/32.
The warning from the company's auditors is the latest sign that some Internet companies may be having trouble keeping afloat. A study published earlier this month questioned the viability of a number of sites, including drkoop.com (KOOP: Research, Estimates), online grocer Peapod (PPOD: Research, Estimates), Internet retailer CDNow (CDNW: Research, Estimates) and financial news site MarketWatch.com (MKTW: Research, Estimates).
drkoop.com, founded by former U.S. Surgeon General C. Everett Koop, has struggled to compete in the crowded health information Web sector. Wall Street is largely unenthusiastic about such companies, which are seen as content providers with limited revenue growth opportunities compared with firms that are more focused on e-commerce.
 The auditors' report "describes the uncertainty as to our ability to continue as a going concern due to our historical negative cash flow and because, as of the date they rendered their opinion, we did not have access to sufficient committed capital to meet our projected operation needs for at least the next 12 months," the Austin, Texas-based company wrote in the SEC filing.
In the filing, the company said it will try to generate funds through additional debt or equity financing this year.
The company did not respond to requests for comment from CNNfn.com. The firm has a content sharing deal with America Online Inc. (AOL: Research, Estimates), whose merger with CNN parent company Time Warner Inc. (TWX: Research, Estimates) is pending.
drkoop.com, founded in 1997, went public in June 1999. The company posted a net loss of $56.1 million last year. The firm's SEC filing said it expects to lose money "for the foreseeable future" as it tries to grow.
Shares of drkoop's competitors also dropped Friday, amid concerns that other Internet health companies may face financial problems. Medscape.com (MSCP: Research, Estimates), which is partially owned by CBS Corp. (CBS: Research, Estimates), slipped 11/32 to 5-11/32. OnHealth Network Co. (ONHN: Research, Estimates) lost 1/2 to 4-1/4, a new low.
Also, shares of Healtheon/WebMD (HLTH: Research, Estimates), which runs a consumer Web portal in addition to administrative services for doctors and payers, hit a 52-week low. The once high-flying stock lost 3-1/16 to 27-3/4, compared with a 12-month high of 126-3/16.
Healtheon/WebMD provides content to CNN.com. (CNN parent company Time Warner also owns a small equity stake in the company.) 
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