A Ride on Fortune's Wheel

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 thecompany. 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. Andat the stock's peak in July 2000 -- less than a month after the company'sinitial 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$160million in venture capital.Dixon's term on StorageNetworks' board was set to expire in 2003. The company says it has no immediate plans to fill the vacancy.

Tom Davey, special to Byte and Switch, http://www.byteandswitch.com