Traditional companies also sell debt or go to a bank when they need to raise money. But thanks to the bull market, most Internet firms have been able to treat the stock market as their line of credit. Even with that, Egghead likely will soon have to sell more new shares and reduce the value of current shareholders' stakes even more. Adjusting the thermostat Companies can speed up or sometimes slow down cash burn. He says the online travel agent will raise more money by year's end, but won't disclose how.
Unusual charges can skew cash burn analysis.
Consider Egghead, which was Onsale until it bought Egghead and adopted its name. The new Egghead bled cash in the fourth quarter due to one-time expenses having to do with its purchase of the old Egghead. CDnow, on the other hand, benefited from a one-time boost in the fourth quarter by an unusual jump in accounts payable, or money it is owed by others. CDnow stated in a press release that it has enough cash to last through September of this year. But Market Guide's estimates found that CDnow had enough cash to last until July of next year.