‘What in the World Happened’ Kind of Year Hit Valley Like a Hurricane COMMENTARY From The Newsroom Michael Hart Back in January, most business people knew 2001 wasn’t going to be like the past few gangbusting years. However, few knew they’d end up here at the last week of December asking themselves, “What happened?” Sure, at this time a year ago, companies were starting to see customers run out of enthusiasm, checks come in a little slower, deals harder to make. But the era of prosperity had extended itself for so long that many hardly remembered how bad things could get. Then the global telecommunications and PC industries crashed and many of the Valley tech companies who supply components to the Ciscos and Lucents of the world saw their orders vanish. Suddenly, potential office building tenants weren’t returning calls from real estate brokers. Then came the shock of Sept. 11. Now, the stock market has at least returned to pre-Sept. 11 levels and unemployment in the Valley has taken a dive to its lowest point since 1996. The continual juggling of good and bad news indicates how confusing 2001 has been to those trying to do business. As you can read elsewhere in this week’s issue of the Business Journal, 40 percent of the Valley’s public companies lost money this year. However, one company, WMC Mortgage Corp., shut down 38 brick-and-mortar branches and went on line, increasing revenue by $465 million. NetZero Inc., one of the last of the hopeful free Internet service providers, sued its only remaining significant rival, Juno Online Services, for patent infringement a few months before working out a merger agreement with it. The Right Start Inc. dodged being delisted by Nasdaq twice before buying Zany Brainy Inc. and FAO Schwarz and increasing its market cap by about $170 million. It still ended the third quarter with a $10 million net loss. Undoubtedly, there are local companies who are getting out of 2001 alive: Syncor International continues to grow revenues with a sound diversification strategy, Countrywide Credit can’t find enough loan processors to manage its refinancing boom and Unilab Corp. managed to pull off an IPO in which it raised more than $100 million – and its stock price. So, here’s hoping that in 2002 we all have the wisdom to know which examples to learn something from. Michael Hart is editor of the San Fernando Valley Business Journal. He can be reached at [email protected].
