Individual Investor Group's Garage Sale

Baldwin Louie — Fri, 29 Sep 2000 15:00:00 -0700

Jonathan Steinberg, son of financier Saul, is joining the ranks of the content company CEOs fighting for survival. His Individual Investor Group (IIGP), publisher of Individual Investor magazine and IndividualInvestor.com, announced Friday morning that it has sold a grab bag of assets for $8 million, easing the company's cash crunch and forestalling an outright sale.

Individual Investor and its Web site have been spared. But Ticker, a monthly magazine aimed at brokers, and the subscription site InsiderTrader.com were both sold. The company also unloaded a pair of domain names and a warrant for 250,000 shares. Edgar Online, an online provider of business, financial and competitive information, is the buyer for InsiderTrader. Global finance site 123Jump.com bought Ticker. Prices for the magazine and the site were not disclosed.

The two domains - whose names and buyers also were not revealed - sold for a total of $1 million, and the 250,000 shares sold to an undisclosed buyer for another $1 million. To relieve any future cash crunches, the company has also opened a $2 million line of credit with aerospace and finance conglomerate Textron (TXT) and its Systran division.

CFO David Allen said the sales are part of a refocusing on Individual Investor the brand and on its magazine in particular, rather than its Web presence. "We're going to stick to our knitting and focus on the individual investor category," Allen says.

As for the company's Internet strategy, Allen says: "The reality today is that magazines need a complementary product, particularly in this genre. Our Web site strategy is to make sure we complement what we do in print. There are certain advantages to the site and to the magazine and you've got to play to the strength of both."

Ticker and InsiderTrader.com accounted for 22 percent of Individual Investor Group's revenues in the first six months of the year, or approximately $2.6 million out of $11.4 million. The company posted a $3.4 million net loss during that period, according to SEC filings, just slightly less than the $3.6 million loss a year ago. Allen said the company did not expect to be profitable in the third quarter but will, as a result of the sales, report a capital gain of $6.7 million. The company's stock was up 38 percent at $1.38 in late-afternoon trading.

Individual Investor Group announced in June that it had hired the media investment bankers The Jordan, Edmiston Group to "explore strategic alternatives ... including the possible sale of the company." The company had been running low on cash, with only $2.5 million in the bank at the end of June; an unidentified hedge fund backed out of a planned investment after April's market correction battered its portfolio. Individual Investor Group's previous benefactor in a pinch, Saul Steinberg, has fallen upon hard times himself and elected not to invest any further in his son's company.

Greg Lindsay writes for Inside.com.

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Individual Investor Group's Garage Sale