<PAGE>
Filed pursuant to Rule 424(b)(3)
Registration Statement No. 333-38334
PROSPECTUS SUPPLEMENT DATED OCTOBER 26, 2000
(TO PROSPECTUS DATED AUGUST 25, 2000)
3,000,000 SHARES OF 6 3/4% CUMULATIVE CONVERTIBLE PREFERRED STOCK
AND 7,050,000 SHARES OF COMMON STOCK ISSUABLE ON CONVERSION
OF 6 3/4% CUMULATIVE CONVERTIBLE PREFERRED STOCK
RHYTHMS NETCONNECTIONS, INC.
-----------------------------------------
You should read this Prospectus Supplement and the accompanying prospectus
carefully before you invest. Both documents contain information you should
consider when making your investment decision.
SEE "RISK FACTORS" BEGINNING ON PAGE 1 OF THE PROSPECTUS TO READ ABOUT
FACTORS YOU SHOULD CONSIDER BEFORE BUYING SHARES OF OUR SERIES F PREFERRED STOCK
OR COMMON STOCK.
SELLING STOCKHOLDERS
The following tables update information contained in the prospectus, dated
August 25, 2000, regarding the current holders of the Series F preferred stock,
and the underlying common stock issuable upon conversion of the Series F
preferred stock.
PREFERRED STOCK
<TABLE>
<CAPTION>
Shares owned Shares Shares owned
before the offered for after this
offering sale offering
------------ ------------ ------------
<S> <C> <C> <C>
Augusta Partners, L.P. 75,000 75,000 -0-
American Variable Insurance Series, Growth-Income Fund (1) 188,000 188,000 -0-
Bear, Stearns & Co. Inc. 20,000 20,000 -0-
BNP Arbitrage SNC 45,531 45,531 -0-
BNP Copper Neff Convertible Strategies Fund, L.P. 2,969 2,969 -0-
Chase Securities, Inc. (2) 26,000 26,000 -0-
CIBC World Markets International Arbitrage Corp. 55,000 55,000 -0-
Clinton Riverside Convertible Portfolio Limited 40,000 40,000 -0-
Dallas Police & Fire Pension System 19,500 19,500 -0-
</TABLE>
S-1
<PAGE>
<TABLE>
<CAPTION>
Shares owned Shares Shares owned
before the offered for after this
offering sale offering
------------ ------------ ------------
<S> <C> <C> <C>
D.E. Shaw Investments, L.P. 30,000 30,000 -0-
D.E. Shaw Valence, L.P. 45,000 45,000 -0-
Deutsche Bank Securities Inc. 620,000 620,000 -0-
Donaldson, Lufkin & Jenrette Securities Corp. 47,000 47,000 -0-
Fifth Third Bank 10,000 10,000 -0-
Goldman Sachs & Co. for the account of Ardsley O
Sphere Fund, Ltd. 105,000 105,000 -0-
Goldman Sachs & Co. for the account of Ardsley
Partners Fund I, L.P. 65,000 65,000 -0-
Goldman Sachs & Co. for the account of Ardsley
Partners Fund II, L.P. 95,000 95,000 -0-
Goldman Sachs & Co. for the account of Ardsley
Partners Institutional Fund, L.P. 65,000 65,000 -0-
Goldman Sachs & Co. for the account of HH Managed
Account 1 Limited 60,000 60,000 -0-
Grace Brothers, Ltd. 15,000 15,000 -0-
Houston Firemen's Relief and Pension Fund "B" 2,500 2,500 -0-
Houston Municipal Employees Pension Fund 4,500 4,500 -0-
The Income Fund of America (1) 250,000 250,000 -0-
JAS Securities 25,000 25,000 -0-
JMG Capital Partners, L.P. 15,000 15,000 -0-
JMG Triton Offshore Fund, Ltd. 90,000 90,000 -0-
J.M. Hull Associates 3,800 3,800 -0-
JP Morgan Securities 75,000 75,000 -0-
KBC Financial Products 50,000 50,000 -0-
Lehman Brothers Inc. 20,000 20,000 -0-
LLT Limited 8,000 8,000 -0-
Loomis Sayles High Yield Income Fund 1,000 1,000 -0-
Lyxor Master Fund 22,000 22,000 -0-
Mainstay Convertible Fund 45,000 45,000 -0-
Mainstay VP Convertible Portfolio 20,000 20,000 -0-
McMahan Securities Company L.P. 5,550 5,550 -0-
Merrill Lynch, Pierce, Fenner & Smith , Inc. (5) 128,990 128,990 -0-
Morgan Stanley & Co. 10,000 10,000 -0-
New York Life Separate Account #7 10,000 10,000 -0-
Philip J. Hempleman 30,000 30,000 -0-
Quattro Fund, LLC 4,500 4,500 -0-
RAM Trading Ltd. 140,000 140,000 -0-
Salomon Smith Barney Inc. (3) 50,710 50,710 -0-
SAM Investments LDC 150,000 150,000 -0-
San Diego County Employees Retirement Association 20,000 20,000 -0-
Southport Management Partners, L.P. 25,000 25,000 -0-
Southport Partners International, Ltd. 62,000 62,000 -0-
St. Claire International 5,000 5,000 -0-
State of Connecticut Fund "F" 7,500 7,500 -0-
Triton Capital Investments, Ltd. 28,000 28,000 -0-
White River Securities LLC 20,000 20,000 -0-
Zurich HFR Master Hedge Fund Index Ltd. 5,000 5,000 -0-
</TABLE>
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<PAGE>
COMMON STOCK
<TABLE>
<CAPTION>
Shares Owned Shares Shares owned
Before the offered for after this
Offering sale offering
------------ ----------- --------------
<S> <C> <C> <C>
Augusta Partners, L.P. 176,250 176,250 -0- *
American Variable Insurance Series, Growth-Income Fund (1) 7,180,000 441,800 6,738,200 (4)
Bear, Stearns & Co. Inc. 47,000 47,000 -0- *
BNP Arbitrage SNC 104,648 104,648 -0- *
BNP Copper Neff Convertible Strategies Fund, L.P. 6,978 6,978 -0- *
Chase Securities, Inc. (2) 61,100 61,100 -0- *
CIBC World Markets International Arbitrage Corp. 129,250 129,250 -0- *
Clinton Riverside Convertible Portfolio Limited 94,000 94,000 -0- *
Dallas Police & Fire Pension System 45,825 45,825 -0- *
D.E. Shaw Investments, L.P. 70,500 70,500 -0- *
D.E. Shaw Valence, L.P. 105,750 105,750 -0- *
Deutsche Bank Securities Inc. 1,460,825 1,457,000 3,825 *
Donaldson, Lufkin & Jenrette Securities Corp. 110,450 110,450 -0- *
Fifth Third Bank 23,500 23,500 -0- *
Goldman Sachs & Co. for the account of Ardsley O
Sphere Fund, Ltd. 246,750 246,750 -0- *
Goldman Sachs & Co. for the account of Ardsley
Partners Fund I, L.P. 152,750 152,750 -0- *
Goldman Sachs & Co. for the account of Ardsley
Partners Fund II, L.P. 223,250 223,250 -0- *
Goldman Sachs & Co. for the account of Ardsley
Partners Institutional Fund, L.P. 152,750 152,750 -0- *
Goldman Sachs & Co. for the account of HH Managed
Account 1 Limited 141,000 141,000 -0- *
Grace Brothers, Ltd. 35,250 35,250 -0- *
Houston Firemen's Relief and Pension Fund "B" 5,875 5,875 -0- *
Houston Municipal Employees Pension Fund 10,575 10,575 -0- *
The Income Fund of America (1) 7,325,700 587,500 6,738,200 (4)
JAS Securities 58,750 58,750 -0- *
JMG Capital Partners, L.P. 35,250 35,250 -0- *
JMG Triton Offshore Fund, Ltd. 211,500 211,500 -0- *
J.M. Hull Associates 8,930 8,930 -0- *
JP Morgan Securities 176,250 176,250 -0- *
KBC Financial Products 142,500 117,500 25,000 *
Lehman Brothers Inc. 47,000 47,000 -0- *
LLT Limited 18,800 18,800 -0- *
Loomis Sayles High Yield Income Fund 2,350 2,350 -0- *
Lyxor Master Fund 51,700 51,700 -0- *
Mainstay Convertible Fund 105,750 105,750 -0- *
Mainstay VP Convertible Portfolio 47,000 47,000 -0- *
McMahan Securities Company L.P. 12,925 12,925 -0- *
Merrill Lynch, Pierce, Fenner & Smith , Inc. (5) 3,031,265 3,031,265 -0- *
Morgan Stanley & Co. 23,500 23,500 -0- *
New York Life Separate Account #7 23,500 23,500 -0- *
Philip J. Hempleman 70,500 70,500 -0- *
Quattro Fund, LLC 28,200 10,575 17,625 *
RAM Trading Ltd. 329,000 329,000 -0- *
Salomon Smith Barney Inc. (3) 119,169 119,169 -0- *
SAM Investments LDC 352,500 352,500 -0- *
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
Shares Owned Shares Shares owned
Before the offered for after this
Offering sale offering
------------ ----------- --------------
<S> <C> <C> <C>
San Diego County Employees Retirement Association 47,000 47,000 -0- *
Southport Management Partners, L.P. 58,750 58,750 -0- *
Southport Partners International, Ltd. 145,700 145,700 -0- *
St. Claire International 11,750 11,750 -0- *
State of Connecticut Fund "F" 17,625 17,625 -0- *
Triton Capital Investments, Ltd. 65,800 65,800 -0- *
White River Securities LLC 47,000 47,000 -0- *
Zurich HFR Master Hedge Fund Index Ltd. 11,750 11,750 -0- *
</TABLE>
* Represents less than one percent of total shares outstanding as of August
14, 2000.
(1) Capital Research and Management Company serves as the investment adviser to
this selling stockholder.
(2) Chase Securities, Inc. served as co-underwriter for Rhythms Netconnections'
private placements of 12 3/4% Senior Notes and 14% Senior Notes.
(3) Salomon Smith Barney Inc. served as co-underwriter for Rhythms
Netconnections' private placements of Series F preferred stock, 12 3/4%
Senior Notes and 14% Senior Notes.
(4) Includes a total of 6,738,200 shares of common stock, representing 8.5% of
the total shares outstanding as of August 14, 2000, beneficially owned by
other investment funds in which Capital Research and Management Company
serves as investment adviser.
(5) Merrill Lynch, Pierce, Fenner & Smith, Inc. served as co-underwriter for
Rhythms Netconnections' private placements of Series F preferred stock, 13
1/2% Senior Discount Notes, 12 3/4% Senior Notes and 14% Senior Notes and
served as co-underwriter for Rhythms Netconnections' public offering of
Common Stock.
GENERAL
You should rely only on the information provided or incorporated by
reference in this prospectus supplement and the prospectus. We have not
authorized anyone else to provide you with different information. You should not
assume that the information in this prospectus supplement is accurate as of any
date other than the date on the front of these documents.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER REGULATORY
BODY HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
The date of this Prospectus Supplement is October 26, 2000.
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