Homestore CFO Resigns; Stock Falls
Homestore.com Inc. shares fell 20% after the biggest online home-listing company said Chief Financial Officer Joseph Shew resigned.
Shew had been CFO since February and left for personal reasons, the company said in a statement. Homestore.com shares have fallen 30% since it said last month that it may take a charge of as much as $950 million this quarter for the falling value of acquisitions.
The company’s shares Thursday fell 63 cents to $2.47 on Nasdaq.
Homestore.com, which has more than 90% of the home-sale listings on the Internet, is suffering from a drop in advertising amid the economic downturn. The company lost $106 million in the third quarter as advertising revenue fell 44%. Advertising accounts for one-third of the company’s business.
The Westlake Village-based company said last month that it won’t meet analysts’ revenue estimates, prompting at least six investment banks to cut their ratings on the company’s shares.
Prudential Financial Inc. analyst Mark Rowen said last month that the company may face a cash crunch early next year.
There’s concern “when a CFO resigns and there’s no immediate replacement,” said Laura Richardson, an analyst at Adams, Harkness & Hill in Boston. Shew had a good background in accounting, she said.
Homestore.com spokesman Gary Gerdemann said the company “at this point is not providing further details.”
Stuart Wolff, Homestore.com’s chief executive, was not immediately available to comment. Shew could not immediately be reached.
“Regardless of the reasons, this is clearly a blow to Homestore’s restructuring plans,” said Heath Terry, a Credit Suisse First Boston analyst, in a report.
The company has fired employees, combined divisions and formed new groups to focus on acquisitions and advertising sales. Since October, the company has laid off 700 employees, or 20% of its work force.
Among the company’s acquisitions this year were the February purchase of Cendant Corp.’s Move.com unit for about $757 million, and the August purchase of IPlace Inc., which lets consumers check their credit reports online, for $161 million.
Shew was promoted to CFO in conjunction with the Move.com purchase. He joined the company in August 1998 from Walt Disney Co. The charge may be as low as $650 million, the company said in a Securities and Exchange Commission filing last month. Homestore.com has assets of $1.74 billion.
