Financial backers withdraw funding; share price plunges Dark days for Peapod US internet grocery business Peapod was rocked this week when four financial backers withdrew $120m of funding after ceo Bill Malloy left the company, blaming his health. The funding was withdrawn by Apollo Management, the Yacaipa Companies, Pequot Capital Management and Group Rallye as questionmarks were placed over the future direction of the company. Peapod has reported substantial operating losses and claims to be down to the last $3m in hand ­ about as much as its monthly losses in the last quarter of 1999. The statement has led to legal action by shareholders after a dramatic fall in the company's share price, which fell more than 55% last week. The lawsuit alleges the company "artificially inflated" the stock price in violation of federal regulations, most notably with a statement in November that claimed it had sufficient funds to operate into the third quarter of 2000. Malloy's duties will be taken on by Andrew Parkinson, Peapod's co-founder and chairman. Drayton McLane, vice-chairman of Wal-Mart Stores and a Peapod director since last year, will join the chairman's new team, fuelling speculation Wal-Mart may lead a full takeover of the company. The company has instructed its financial advisers to explore strategic alternatives, including alternative financing or a possible sale of the company. Peapod's plummeting stock price comes in the same week as heavy losses for Nasdaq traded technology stocks. in the US has announced a $30m funding package from Spanish company Parmalat SpA, a division of Parmalat Finanziaria, a leading international food company. {{NEWS }}