• 09/13/2001
    11:15 PM
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A Ride on Fortune's Wheel

The experience of Harry Dixon, late of StorageNetworks' board, illustrates the highs and lows of the SAN market
In a tersely worded statement Wednesday, StorageNetworks Inc. (Nasdaq: STOR) announced the resignation of Harry Dixon from its board of directors (see StorageNetworks' Director Resigns). While not a particularly noteworthy announcement for investors, Dixon's situation nevertheless illustrates the highs and lows of the storage service provider market over the past few months.

Dixon, a former senior VP of global sales and services at EMC Corp. (NYSE: EMC), bought 8 million shares, at 3 cents a share, for $240,000 when StorageNetworks was founded in 1998.

According to filings with the Securities and Exchange Commission, Dixon still owns 7.8 million shares, or 8 percent of the company. Based on Monday's closing price of $3.91 a share, his equity is worth about $30 million.

Based on the stock's 52-week high, however, his equity was $874 million last September, as the stock hit $112 a share. And at the stock's peak in July 2000 -- less than a month after the company's initial public offering -- Dixon was, briefly, a billionaire.

StorageNetworks gave no reason for Dixon's departure, but it's clear he has other priorities. He is presently the CEO of GiantLoop Network Inc., a startup that leases dark fiber to enterprises for a variety of uses, including storage networking. Founded just 18 months ago, GiantLoop has 250 employees and has raised $160 million in venture capital.

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