NEW YORK (CNNfn) - NorthPoint Communications said Thursday it is still evaluating its options in the wake of Verizon Communications' decision to end plans for a stake purchase and merger with the DSL firm, while shares of the company hovered around 50 cents.|
On Wednesday, Verizon said it was terminating plans to buy a 55 percent stake in NorthPoint for $800 million and merge the companies' DSL businesses. Verizon announced an expected boost in profits Thursday due to its decision.
NorthPoint President Liz Fetter said the company Verizon is not entitled to terminate the agreements, reiterating comments made in a statement Wednesday, but said she could not comment on possible legal options.
Fetter said the company is "evaluating quickly."
Verizon spokesman Peter Thonis said Wednesday his company disagrees with NorthPoint and that there is nothing to prevent the dissolution of the agreements. He also confirmed there is no breakup fee for terminating the deal.
Analysts said Verizon's decision put NorthPoint's future very much in doubt.
"Now that NorthPoint has lost Verizon as a source of funding, we are extremely concerned regarding the ongoing viability of the company as we forecast that NorthPoint has, at most, enough cash and available funding sources to last into first quarter 2001," Credit Suisse First Boston analysts said in a research note.
Fetter said the San Francisco-based company has about $150 million in cash and equivalents and $165 million available from its bank. She stressed Verizon's decision did not put NorthPoint in default.
Shares of Verizon fell 69 cents to $55.13. NorthPoint dropped $1.47 to 53 cents.