Excite@Home, one of the internet's best known names, was fighting for its financial future yesterday amid growing speculation that it would be forced to file for bankruptcy.

Shares in the broadband internet specialist plummeted almost 40% yesterday as analysts, credit rating agencies and even Excite's own auditors questioned whether it could survive.

As its shares slumped to a record low of 44 cents (30p), Excite admitted that its chances of raising the capital needed to survive by the end of the year were slim.

In an annual report filed with the securities and exchange commission, auditors Ernst & Young expressed "substantial doubt about the company's ability to continue as a going concern". It said Excite had racked up "recurring operating losses and negative cash flows and has a substantial need for additional funding" to keep running.

Credit rating agency Standard & Poor's underlined the company's difficulties by cutting its credit rating from "B-" to "CCC", a level only usually awarded to businesses with se vere financial problems. "Severely limited liquidity is likely to lead to a further downgrade in the near term, unless the company can access additional funding," S&P said after assigning a "negative" outlook.

Henry Blodget, an analyst at Merrill Lynch, predicted that Excite would probably declare itself bankrupt, reorganise and sell pieces of its business to cable or internet service providers.

At the height of the dot.com boom the company was one of the highest-profile US internet firms and a leading proponent of broadband internet access to the home. It has more than 3m customers taking its @Home service and 10,000 businesses subscribing to @Work.

But the slump in internet advertising and mounting losses in its media division have increased debt to $1bn. Last quarter Excite lost $346.3m. Since the start of the year it has cut 800 jobs and is in danger of having its shares delisted from the Nasdaq stock market.

Excite is 23% owned by telecoms firm AT&T and continued uncertainty over the ownership of the latter's own broadband unit had compounded Excite's difficulties, analysts said.