ebookers.com Weathers the Dot-Com Downturn
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Holmes Report
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ebookers.com Weathers the Dot-Com Downturn

The past ten months saw the worldwide crash in tech stocks; the migration of private investors out of the sector; and the alteration of expectations and modeling by investors and analysts, and ebookers.com required refinancing.

Paul Holmes

GCI Financial was appointed by ebookers.com in the immediate aftermath of its listings on NASDAQ and Germany’s Neuer Markt, at the end of 1999.  Alex Mackey’s responsibility is to counsel the Chairman, CEO and COO on their strategic communications.

The past ten months saw the worldwide crash in tech stocks; the migration of private investors out of the sector; and the alteration of expectations and modeling by investors and analysts.  In addition, ebookers.com required refinancing mid-year and moved much of its sales and marketing initiatives towards PR.

Faced with this ever-changing landscape, Alex Mackey worked with the Company to implement a strategy of consistent messaging (ie. communicating on our terms); using every medium available – print, broadcast, on-line and wire services; and generating a constant news flow to support the Company’s quarterly earnings statements.

However, as the financial markets became more fixated with “cash burn” – and the majority of the B2C sector saw stock prices decline – ebookers.com’s requirement for additional funding became an issue.  An analyst’s report speculating on ebookers becoming the next dot com failure – following in the footsteps of Boo.com – was picked up and widely reported by Bloomberg.  Suddenly this story gained some momentum – and supposition became fact in certain quarters.

Alex had to act quickly to bolster the failing stock price – and reassure investors.  He elected to place an exclusive with the Financial Times, contradicting this report – and reminding the market that most of ebooker’s European acquisitions were profitable (at an operating level), rendering the Company’s marketing spend as discretionary – and the issue of cash burn immaterial.  It was a strategy which could have back-fired, if the Financial Times had adopted the same theme as Bloomberg – which was potentially a better story.

The tactic worked however, and a number of other international publications picked up on the story – thereby killing it once and for all and reassuring the financial markets.

However, the selling “frenzy” throughout the B2C sector meant that we had to completely re-balance the Company’s share register.

Given that Neuer Markt companies issue bearer shares (i.e. unregistered shares), it is almost impossible to track ownership.  Therefore, Alex accessed and analyzed the registers of their UK competitors and peers, in order to produce a list of potential holders to whom we could market.

Finally, over the past ten months, Alex has worked with the management to promote the ebookers.com brand, strategy, management and products and services – in all of the Company’s European markets.
The results have been re-assuring.  ebookers.com was one of the few listed e-commerce companies to raise additional funding at the height of the tech ‘bear’ market.  In addition, the Company has become – and continues to be – one of the most recognized European internet brands and the UK’s number one rated on-line travel brand, at the very time in which it was reducing its marketing spend and concentrating on PR.  The key to this success has been quick responses to potential crises; a willingness to exploit every story opportunity; lateral thinking – in accessing new sources of potential investors, and persuading broking analysts to look at them on a stock-specific basis – rather than a sector one.

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