The accounting firm Deloitte & Touche said Thursday that it severed its relationship with 2TheMart.com, marking the latest of several setbacks for the company that plans to launch an Internet auction site.
Shares of Irvine-based 2TheMart.com plummeted 21% on Thursday after the departure of the accounting firm was disclosed. The stock closed at $14, down $3.63 in heavy trading over-the-counter.
At that price, however, 2TheMart's 25 million shares are valued at $350 million, even though the company has yet to provide any services and has not yet filed basic financial information with regulators.
2TheMart had said on June 4 that Deloitte was finalizing an audit of its financial statements in preparation for an initial filing of documents with the Securities and Exchange Commission by June 9 in an effort to have the stock listed. 2TheMart, which went public by merging with a shell company in January, has yet to make that filing.
"They are not a client of the firm," said a spokesman for Deloitte. He declined to provide further details.
In a prepared statement, 2TheMart said it is "in the final stages of selecting another accounting firm. We plan to make an announcement in the near future." The company declined to comment further.
On June 10, the company said its auction site, originally scheduled to make its debut by June 30, would not be running until the fourth quarter.
The site is being developed by International Business Machines Corp.'s Global Services unit at a cost of $9.5 million.
The company's shares soared from $2 on Jan. 13 to a high of $50 on Jan. 20, the day after 2TheMart said its site would be running by the second quarter and would compete with established auction sites such as EBay Inc. and Ubid Inc.
The company went public in January under the direction of Chief Executive Dominic J. Magliarditi, 35, and Chairman Steven Rebeil, 36.
Two years ago, their attempt to become officers of Ameristar Casinos Inc. failed when the Nevada Gaming Commission denied them licenses to run a casino after finding they were "not of good character, honesty and integrity," according to commission documents.
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Ups and Downs
2TheMart.com's shares plunged 21% on Thursday on news that the accounting firm Deloitte & Touche had ended its relationship with the Internet auction company. Its stock has swung widely since early this year. Weekly closes and latest:
Source: Bridge Information Systems