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  • « Hating the haters | Main | PlanetOut going down? »

    May 09, 2007

    PlanetOut confirms sales fears

    Posted by: Chris

    Lgbt_stockprice Gay media company PlanetOut, Inc., announced disappointing first quarter sales results today, sending the stock price plummeting to near record lows. The company, which trades on the NASDAQ exchange with the symbol LGBT, took in a total of $16.8 million in revenue so far this year, down 5 percent from the same period in 2006.

    Still, company CEO Karen Magee tried to sound a positive note. "We are taking some major steps to generate the healthy revenue growth and solid earnings performance that we believe this company is capable of producing," Magee said in a press release issued today.  "To complete that work and regain the confidence of the market will take time."

    Online and print ad sales for the media conglomerate were steady at $5.3 million, but subscription sales fell from $6.3 million in the first quarter last year to only $5.6 million this time around. Overall, the company suffered a net loss for the quarter of $6.6 million, after breaking even over the first quarter in 2006.

    Critics have complained PlanetOut lacks focus because its properties are too far flung, from Gay.com and PlanetOut.com online, to print publications the Advocate, Out and Out Traveler, to the RSVP gay cruise line. I'm not surprised at the drop in subscription revenue.  With more and more popular social networking sites out there that don't require membership fees — MySpace, Friendster, Orkut, Connexion, Gaydar, BigMuscle etc — fewer will be willing to pay for the same thing at Gay.com.

    Magee suggested the attempt to find focus was an ongoing process at PlanetOut. "The tremendous promise represented by our businesses and the market, we believe, is as solid as ever," said Magee, who took over as CEO last June from longtime chief Lowell Selvin.

    "But without question, our business model is in transition. We need to identify the areas with the most significant growth prospects for us, be clear about our objectives, and streamline the rest of our business to enable us to focus our resources and talent on those opportunities which we believe will return the most value to our shareholders."

    Wall Street may be tough to convince. PlanetOut's stock price has already dropped from $15 per share in January 2005, to $10 as recently as a year ago.  The price began the year at $4.50 but was trading at $2.49 per share at the end of the day today, down 5 cents for the day.

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    Comments

    1. dan on May 10, 2007 11:17:03 AM:

      2.69 seems like the salad days today. the sell off has been massive and immediate. share price is at 1.63 this morning, a 30+% drop since yesterday. dead in the water, unless someone buys them out completely at bargain basement price and pulls them off the public market. this is bad.

    1. dan on May 18, 2007 2:23:49 PM:

      and another precipitous drop today...all the way down to 1.23 a share.

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