Tuesday, January 16, 2001
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Posted on: Tuesday, January 16, 2001

State's stock in Internet company plunges

Associated Press

i has seen much of an early windfall from an investment in an Internet firm evaporate in the past year.

The state Strategic Development Corp. paid $450,000 for 315,000 shares of Digital Island Inc. in 1997.

After the Honolulu-founded company went public, its stock price peaked at $148 a share in December 1999, making the state’s investment worth nearly $50 million.

The state received $2 million from the sale of 24,400 shares in January of last year at a price of about $100 a share.

In September, the state received an additional $150,000 through a stock sale at $30 a share.

The remaining 228,000 shares are worth $1.06 million based on Friday’s closing price of $4.66 on the Nasdaq composite index.

Digital Island was founded in Honolulu and moved to San Francisco in 1999. The company provides network services that focus on electronic commerce.

Bill Richardson, head of HMS Hawaii Management Partners, which handles the investment for the state, said Digital Island still has growth potential, noting the firm lacks competitors in the business of delivering audio and video to the Internet.

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