Dot-Com Freerealtime Trying to Work Its Way Out of Bankruptcy
All may not be lost for Aliso Viejo-based Freerealtime.com Inc.
After filing for Chapter 11 bankruptcy protection a few weeks back, the Internet stock quote and financial content site has met with possible buyers who could pump some capital and life back into the company.
“It is an asset that has value, and we are exploring our options,” said Byron Roth, chairman and chief executive of Roth Capital Partners LLC, which owns about 12% of Freerealtime.
According to Roth, Freerealtime has drawn interest from several viable buyers. But, so far, nothing has come out of any negotiations.
Freerealtime’s principals, who didn’t return calls for this story, are not going down without a fight, either.
Like many troubled dot-coms, Freerealtime is turning away from advertising to paid subscribers for revenue. It also is in the process of developing some new products to generate revenue. And it is selling two of its units, Redchip.com and DigitalOffering.
“They are trying to get on their feet. They will be moving into a smaller space,” said Gordon McBean, president of DigitalOffering, which shares space with Freerealtime in Aliso Viejo.
Late last year, Freerealtime started DigitalOffering as an institutional trading subsidiary. But the company is suffering from a decline in demand for online advertising and the ongoing slump in the equity markets.
“Any kind of offering is difficult to get done right now, especially using Internet retail distribution,” Roth said.
That was what DigitalOffering was looking to do. The company received its broker-dealer license in October and was in the process of launching online offerings for private placements.
Because of the troubles with Freerealtime, McBean decided to hold off on launching the services.
“We’ll try to run this independently,” McBean said. McBean said he remains confident in DigitalOffering’s business model. Firms such as San Francisco’s Offroad Capital Corp. and New York’s EarlyBirdCapital.com Inc. and Wit SoundView Corp., have completed private placement deals over the Internet.
“We spoke to a lot of regional investment banks without retail distribution of their own, and we will become their retail distribution,” McBean said.
But DigitalOffering has been forced to cut its staff in half to four people.
“We’ve got capital to see us through,” McBean said. n
