Yuki Noguchi and Renae Merles
David Schaeffer has the unsigned contract on his desk that would have given his telecommunications company the licenses to wire the World Trade Center with fiber-optic cable.
Cogent Communications Inc. also signed 20 business clients in the Twin Towers for its standard, $1,000-a-month high-speed Internet service. Cogent contractors already were at work, laying a path of fiber to the heart of the financial district.
Instead of closing those deals, however, employees at the Georgetown-based company watched from their 26th-floor offices in New York as one plane, then another, crashed into the buildings last week. Now, almost a week later, Cogent staffers cannot enter their offices at 32 Avenue of the Americas, six blocks from the blast site. Both the licensing and the deals with the 20 clients are off.
The shock and trauma have delayed, not derailed, other business deals underway for many local companies such as Cogent. As the stock market opens today and more people return to their offices, many firms are looking to get back on their feet and resume the big deals they had in progress.
"We'll regroup and figure out when to close the deal" securing more than $200 million in private funding, said Schaeffer, chief executive of Cogent.
After a recent acquisition of Allied Riser Communications Corp., Cogent was also in the process of filing a registration statement with the Securities and Exchange Commission last week. That was delayed because the lawyers involved have been stranded around the country, Schaeffer said.
George Schmitt still plans to close $200 million to $250 million in financing for E.spire Communications Inc., a local telephone and data firm that has been operating in Chapter 11 bankruptcy.
The deal was supposed to close by the end of the month, but that may get pushed back about four days, said Schmitt, chairman and chief executive of E.spire. Officials of the five investor groups involved were not in New York during the disaster, but they have been grounded in other cities and unable to meet, he said.
By Wednesday, most of E.spire's employees had returned to work. They were talking about the U.S. response to the attacks and working hard to reclaim a semblance of a normal business day, Schmitt said. "It's still good to get back to routine," he said. "You still gotta run the darn company."
The same goes for Arlington-based CACI International Inc., which is moving ahead with its acquisition of Digital Systems International Corp. and plans to close the deal by the end of the year.
"It's slowed us down and distracted us a couple of days," said Steve Waechter, CACI's chief financial officer. "But it's steady as she goes."
Realistically, though, when the center of financial activity is blasted out, the effects are far-reaching and deep.
Four of Illumitek Inc.'s customers and two of its potential clients were affected by the attacks. "Two [clients' offices] are completely gone, and the rest are crippled," which delays all business with them, said Tony Crescenzo, president and chief executive of the Herndon-based information technology firm. When Illumitek's third quarter ends Sept. 30, it will take a hit from the four major deals that have been delayed by the attacks, he said. "The monetary damage is in the hundreds of thousands of dollars for us."
For other firms, jitteriness about national security will mean more uncertainty in the financial markets. Many firms want, or need, to raise money.
Jonathan Cohen fears the already strapped capital market will become even tighter as a result of last week's disasters.
And that doesn't bode well for 20/20 Gene Systems Inc. of Rockville, the firm he founded in May 2000 that is in the middle of raising its first round of institutional funds. The company has $1 million from individual investors, but it needs a significant capital infusion to continue funding its research and development projects, he said.
"The events of the week were first, obviously, a human tragedy, but was secondarily a financial tragedy," Cohen said.
The same is true for Martin Tesler, a top executive for Cardobe Technologies Inc., a software firm in Fairfax, which is seeking additional funding.
"The significance is psychological," he said. "And let's face it, psychology drives the stock market." Staff writer Ellen McCarthy contributed to this report.
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