TheStreet.com Files to Go Public
Hoping to capitalize on Wall Street’s craze for Internet stocks, TheStreet.com Inc., a financial news Web site with 37,000 subscribers, filed Tuesday for an initial public offering, or IPO, that could raise as much as $75 million.
The filing by the New York-based firm comes one day after the New York Times Co., publisher of the New York Times, said it bought a minority stake in TheStreet.com for $15 million in cash and services.
The firm is hoping to mimic the success of San Francisco-based MarketWatch.com Inc., which operates a financial news Web site aligned with CBS and is among many recent Internet IPOs that have multiplied in value in their first trading day.
In January, Market-Watch.com shares soared to $130 and closed at $97.50 in the first trading day, after an initial offering at $17. The stock rose $1.38 on Tuesday to close at $65.50 on Nasdaq.
“This is what exemplifies the three principles of the IPO market right now--timing, timing, timing,” David Menlow, president of data firm IPO Financial Network Corp. of New Jersey, said of TheStreet.com’s offering. “It’s got all the right stuff working for it.”
In its IPO filing with the Securities and Exchange Commission, the company didn’t say how many shares it hopes to sell or what the share price might be.
“The deal will come out at least $15 a share--though it may end up being more,” Menlow speculated, after considering what the New York Times paid for its stake.
Founded in 1996, The- Street.com reported a loss of $16.3 million last year on revenue of $4.6 million. The company expects another loss for this year and “subsequent fiscal periods,” the filing said.
The company, headed by Chairman and Chief Executive Kevin W. English, gets revenue from paid subscriptions and advertisements on its Web site. It features news and columns by financial experts such as hedge fund manager James J. Cramer, a co-founder and director of TheStreet.com.
Cramer owns 2.7 million shares, and Cramer Partners owns another 2.5 million shares, which means he and his partnership could reap $78 million if the deal is priced at $15 a share--but their stake could be worth even more.
TheStreet.com said it will use the money raised in the stock offering for general purposes and possible acquisitions.
The company boasts “strategic relationships” with Yahoo Inc., the No. 1 Internet search service, as well as America Online Inc., the largest online access service, and other companies.
Goldman, Sachs & Co. will underwrite the deal with Hambrecht & Quist and Thomas Weisel Partners, according to the filing. TheStreet.com seeks to have the shares trade on Nasdaq under the symbol TSCM.
