Snyder Communications Inc.'s Internet division, Circle.com, has been reassuring clients this week that it has the cash it needs to do business, the company said, after news reports in the past week raised questions about its financial resources.
The news accounts, including one in Monday's Washington Post, cited a statement in Snyder's latest quarterly report to the Securities and Exchange Commission that Circle.com did not have enough cash on hand as of Sept. 30 to fund operations through the rest of 1999. The funds will have to come from parent Snyder Communications, from borrowings or from new issues of Circle.com stock, the report said.
Couched in the cautionary language of SEC filings, the statement suggested to some clients that Snyder might turn a cold shoulder on Circle.com, which it created as a separate division with its own tracking stock that was issued last month.
"What was said was correct, but the inference was incorrect," said Victor Mandel, Circle.com's executive vice president.
Circle.com "has no shortage of cash to draw upon in an as-needed basis," Mandel said. "We're not an upstart Internet company." Snyder Communications had about $40 million in cash and $50 million available from a line of credit as of Sept. 30, Mandel said.
Snyder Communications has not promised to share a specific part of that with Circle.com. But in its part of the SEC filing, Circle.com said: "We anticipate that Snyder Communications will be in a position to fund the needs of Circle.com in the future and we will monitor and evaluate market conditions to assess the possibility of other sources of debt or equity financing as the need arises."
Synder Communications is controlled by Washington Redskins owner Daniel M. Snyder.