The company was founded in 1997 by Michael W. Malaga and 5 other former executives of Metropolitan Fiber Systems.[2]
On May 5, 1999, during the dot-com bubble, the company became a public company via an initial public offering in which it sold 15 million shares at $24 per share.[3] Malaga, then 34 years old, was worth $300 million on paper.[2]
In September 2000, Verizon agreed to acquire a 55% interest in the company and merge the companies' DSL businesses.[4]
In November 2000, as its customers failed to pay their bills, NorthPoint restated downwards its financial performance for the third quarter of 2000, lowering revenue from $30 million to $24 million.[5][4] After the earnings restatement, Verizon terminated its acquisition agreement, claiming that a material adverse change had occurred.[4] Northpoint sued Verizon to force it to complete the transaction.[6] The lawsuit was settled out of court in July 2002, with Verizon agreeing to pay $175 million to Northpoint.[7] NorthPoint stated that "it would cut its workforce by 19%, or 248 jobs, to lower expenses after the collapse of its merger with Verizon."[8]
Bankruptcy
In January 2001, NorthPoint filed for bankruptcy.[9][10][11] Some internet service providers, which faced a disruption in service, blamed the banks for failing to work out a deal to save the company.[12] In March 2001, AT&T Corporation acquired the assets of NorthPoint for $135 million in a liquidation.[13]
