June 16, 2009
LGBT goes missing
Posted by: Chris
Update at the end of this post:
Tongues are wagging about the apparent delisting of Planet Out, Inc. -- which trades under the symbol LGBT -- from the Nasdaq stock exchange. A post today on Queerty speculates that Planet Out's stock was yanked because the company failed to comply with a 15-day warning from Nasdaq about maintaining a minimum of $10 million in capitalization. I wonder if that's really the reason, or if something less sinister is afoot.
Obviously there've been quite a bit more than 15 days since the March warning from Nasdaq, which makes that the unlikely trigger. Today's date does figure prominently, however, in a June 4 filing by Planet Out with the SEC. In that document, the company's management reveals an amendment to the merger agreement inked between Planet Out and Regent Entertainment Media -- which owns here! TV as well as the Advocate and Out magazines, formerly published by Planet Out.
Under the terms of an amendment to the plan filed back in April, either party could pull out by the end of May if the other party had not been able to complete the merger. The June 4 filing extended that pull-out deadline until yesterday, June 15. So was Planet Out delisted because the merger fell through or because it finally went through?
So far no word from either Regent or Planet Out; the latter's corporate site hasn't been updated and PlanetOut.com itself is carrying "breaking news" about "Bruno" and "how gay is too gay."
Stay tuned...
UPDATE:
We now have our answer, courtesy of a press release announcing that the PlanetOut merger with Regent Media/Here Networks was successfully completed. That's great news for gay media, considering survival at this point is an accomplishment in the current economic environment and the steep decline of media business fortunes:
New company will operate under name Here Media Inc.
June 16, 2009 (LOS ANGELES, CA and SAN FRANCISCO, CA) – Here Networks LLC announced today the completion of the business combination of Here Networks LLC and its publishing affiliate, which includes the LGBT publications The Advocate and Out, with PlanetOut Inc. (formerly-traded under the ticker symbol, LGBT). The new public company resulting from this business combination will be named Here Media Inc. with Stephen P. Jarchow serving as Chairman and Paul Colichman serving as CEO.
On Wednesday, June 10, 2009, the holders of a majority of the outstanding shares of PlanetOut Inc. common stock voted to approve the proposed business combination.
“The close of this deal represents an exciting moment for LGBT consumers across the globe,” said Stephen P. Jarchow and Paul Colichman. “We look forward to bringing new features that will enhance the user experience and keep our customers engaged.”
Here Media now becomes the premier global company for providing news and entertainment to the LGBT community. The company is also uniquely positioned to provide advertisers opportunities to reach its niche audience across platforms including television, online, print publishing, and filmed entertainment. Here Media’s unmatched reach positions the company as a leader in creating an interactive relationship with consumers across all its iconic brands.
Jarchow and Colichman, along with current PlanetOut Inc. Chairman Phil Kleweno, will serve as the initial board of directors of Here Media.
About Here Media
Here Media, Inc. produces and distributes niche content across all platforms worldwide. Here Media’s iconic brands distribute gay media and world cinema programming with universal, humanistic appeal. Its distribution platforms include theaters, television, VOD, broadband, online, print and mobile. It earns subscription, advertising and licensing revenue from its award-winning content.
Here Media owns and operates a variety of media assets including:
Here Studios, a full service motion picture studio. Here Films, a motion picture distribution company. here! Networks, a premium television network featuring programming that appeals to a gay and lesbian audience airing in 96 of the top 100 US markets, including every top 10 market. Iconic print brands including Out, Advocate and HIV Plus, as well as Alyson Books. Online properties including Gay.com, Planetout.com, Advocate.com, Out.com and SheWired.com which provide broadband video and social networking.
Paul Colichman is Chief Executive Officer of Here Media and Stephen P. Jarchow is Chairman. Together, they have produced and/or distributed over 200 motion pictures including Academy Award® winners “Gods and Monsters” and “Departures."
January 16, 2009
RIP to LGBT, Inc.
Posted by: Chris
The slow-motion implosion of PlanetOut, Inc., the largest-ever gay media company and the first ever traded online, has finally concluded. The company that traded as LGBT on the Nasdaq exchange is no more, having announced a merger with with Here TV and Regent Entertainment, the conglomerate that previously gobbled up PlanetOut's marquis titles: the Advocate, Out and Alyson Books.
Then just yesterday, came the inevitable round of layoffs -- fully one-third of all employees at PlanetOut, including the company's chief technology officer.
Much of the reaction to the merger news was the typical worry about conglomeration of LGBT media, which is pretty ironic given that the story here is really the failure of that experiment. While Paul Colichman, the force behind Here and Regent, has succeeded in picking up the pieces of PlanetOut -- and for a song, I might add -- the parts combined are nothing compared to the PlanetOut powerhouse of days gone by.
There are all sorts of reasons, of course. PlanetOut.com basically melted away into nothingness along with its editorial budget, and declined even as a networking site after the merger with Gay.com. The latter then descended into its own death spiral, unable to compete against the likes of Friendster, MySpace and Facebook for networking and Manhunt and Gaydar for hook-ups.
On the print media side, PlanetOut's titles struggled along with the rest of the industry through extremely difficult times. Things weren't helped by the Hollywood-centric, content-free editorial direction of Judy Weider, who oversaw the Advocate during its final years under the ownership of parent company LPI.
When LPI bought Out and put both publications under Weider, the hard-hitting Advocate became the People magazine of the gay press, with gay-for-pay celebrities on most week's covers. The provative Out magazine which got an injection of Attitude from British editor James Collard, morphed into the Advocate's high-gloss twin, something akin to the Us Weekly of gay media.
Both publications have undergone something of a renaissance since PlanetOut ousted Weider. The Advocate, in particular, has become more relevant in the last couple of years than in recent memory, once again become the "must read" of gay politics that it once was.
So kudos to Colichman and Here/Regent for a savvy business strategy that brought together so many famous brands for such an affordable price. We can only hope that the same business acumen, along with the renewed editorial strength of the Advocate, is a sign of a brighter future for the new gay media giant.
For related stories and breaking news, click or bookmark:
August 13, 2008
Gay media downs. . .
Posted by: Chris
This week has not been a good one for PlanetOut, the struggling giant of gay media. First came notice from the NASDAQ stock exchange that the company had failed for 30 consecutive days to maintain the minimum market value ($5 million) of publicly owned stock and as a result is facing "delisting" -- removal from the exchange, where it trades under the symbol "LGBT." PNO has 90 days to rectify the problem by meeting the $5 million mark for 10 consecutive days.
Planet Out's management responded by saying it would monitor the situation and if the picture doesn't look any rosier, the company will ask to be moved to NASDAQ's Capital Market for smaller publicly traded companies.
The downsizing of PlanetOut isn't just in stock value, of course. Just this afternoon, the company announced that it had completed the sale of its magazine, book publishing and soft-porn business, which includes LPI, Inc. (Advocate, Out and their websites, Out Traveler, Alyson Books) and Spec Pubs, Inc. (Men, Freshmen, Unzipped and the now defunct [2] magazine).
The new owner, Regent Entertainment (here!TV, Gay Wired) gets the marquis titles for a song: paying $6.5 million in exchange for not just LPI and Spec Pubs but also $6.5 million in advertising on Gay.com and Planet Out's other remaining properties. What a bargain -- considering Planet Out paid more than $31 million to acquire the same titles just three years ago!
At this point, all eyes are on Regent to see what changes they'll bring to the Advocate and Out, especially. Both publications have struggled alongside their gay and "mainstream" counterparts (Instinct, Genre, Time, Newsweek, People, Us) to stay relevant in the age of instant internet info gratification. From what I've seen, the quality of both pubs has improved considerably under the current editors, and the sale at least insures the fate of so much of national gay media isn't so intertwined. (Although Regent is itself another conglomerate).
The news isn't all gloomy for PNO. Financials released yesterday showed the company had stemmed the bleeding somewhat in losses, from a rate of around $800,000 per month for the last year or so to "just" $932,000 for the entire quarter ending June 30. With the high overhead print pubs out of the picture, a leaner meaner PlanetOut has a shot at turning the corner, or at least making itself more attractive for an acquisition.
Apparently some investors think so as well. After trading between $2.00 and $2.30 for several weeks, LGBT finished at $2.65 yesterday. It's a tiny fraction of early, heady days of $12 a share -- before a 1-to-10 reverse stock split to save the stock when it was trading below $1 per share. But it's something.
For related stories and breaking news, click or bookmark:
April 18, 2008
PlanetOut-LPI sale, take two
Posted by: Chris
Time for me to revisit my post last week about the sale of LPI (Advocate, Out, Alyson Books) by PlanetOut to Regent, owner of Here Networks and GayWired. I was under the impression that the sale did not include Specialty Publications, the division of LPI (and hence, PlanetOut) that publishes the racier Men, Freshmen and Unzipped magazines. (Specialty also published [2], a magazine that included couples in near-XXX action, but no longer.)
That puzzled me because that's historically where more of LPI's profits come from. My pal and gay-journo colleague Rex Wockner pointed me to an SEC filing by PlanetOut that includes the actual "letter of intent" for the sale. That document seems to say that Speciatly Pubs is, in fact, included in the sale.
The inclusion of Specialty Pubs actually makes sense for several reasons. Ever since PlanetOut got a badly needed cash infusion from new investors last year, part of the deal was to find a buyer for the more graphic magazines. In addition, as I noted last week, Specialty has been the LPI profit center for some time.
On the other hand, this new info (at least new for me) means LPI was sold intact for $6 million in the same form that PlanetOut bought it in 2005 for $31.1 million. That's a pretty shocking haircut for PlanetOut considering it was less than three years ago. (Factor the inflation-value of that 2005 price, and the difference is even more dramatic.)
For that $6 million Regent is paying for LPI, PlanetOut is also providing $6 million in advertising with PlanetOut for the films etc. of Here Networks. So for a property PlanetOut paid $31 million in 2005, it got a $6 million ad buy from Regent that it now must fulfill.
None of that means the sale was a bad idea for PlanetOut, given the limited market of potential buyers for LPI and the woes of the print pub business generally. What's more, PlanetOut announced back in January that due to its plunging share price and consecutive quarters of sagging revenue, the company was looking for buyers -- for all or parts of the company.
PlanetOut's ongoing troubles are depressing for those of us with history in the gay media biz. The first gay-focused company to go public (trading as LGBT on the NASDAQ exchange), PlanetOut seemed for awhile there to be succeeding where so many dot.com business had failed.
At least in its present, leaner form, PlanetOut can concentrate on its core online business and hopefully re-emerge in some form that is more financially stable and able to provide more than just another online social network, as its founders intended.
April 10, 2008
PlanetOut sells Advocate, Out, Alyson
Posted by: Chris
UPDATE: The portion of this post that reports the LPI sale did not include Specialty Pubs turns out not to be correct. For details, check out my subsequent post.
The gay media conglomerate PlanetOut dropped a bombshell yesterday, announcing that it would sell off its magazine and book publishing business, including marquee titles like the Advocate, Out and Alyson Books, to Here Networks for a pricetag of $6 million. The deal should be formalized by the end of the month and the sale completed by Aug. 31, the San Francisco Business Times reported:
PlanetOut … wants to return its focus to its web sites gay.com and planetout.com, which have been contributing a smaller percentage of its revenue recently.
The company's online segment has been contributing less to its revenue for each of the last three years. In 2005 it accounted for 87 percent, in 2006 54 percent, and in 2007 51 percent. Magazine publishing's portion of total revenue rose in each of those years, from 13 percent in 2005 to 46 percent in 2006 and 49 percent in 2007.
The sell-off is the latest chapter in the de-coupling of gay media, just years after a trend toward conglomeration. PlanetOut Inc., was itself the result of the December 2000 merger with PlanetOut Corp. (planetout.com) and Online Partners (gay.com). Only months earlier that year, Liberation Publications., Inc. (LPI), which published the Advocate, Alyson Books and soft-core "adult" titles under the name Specialty Publications, had purchased rival Out magazine. Then, in November 2004, PlanetOut Inc., bought LPI, for $32.1 31.1 million (or about $36 35 million in 2008 dollars).
Just four short years later, with PlanetOut struggling financially, the sales price for LPI is only a fraction of what PlanetOut paid, likely reflecting the difficult economic market for print publications generally, and nationwide magazines in particular. These have been challenging times for the Advocate, published biweekly, and Out, published monthly, when local gay publications publish weekly and the Internet is on a 24-hour news cycle.
Here Networks didn't buy LPI's "adult" Specialty Pubs division, though it's unlikely that was based on content since the pay-TV network shows similar content. Those who know LPI well say that Specialty Pubs was long the profit center for the company, but magazines like Men and Freshmen have suffered from online competition as well. But since the LPI that Planet Out purchases is not the same LPI it sold, it's difficult to say how steep a haircut PlanetOut took on the pricetag.
That mystery is compounded by the unusual structure of the deal, which involves the payment of the $6 million as pre-paid advertising to be spent by March 2009. Here will also be assuming the liabilities of LPI as well.
The sale of LPI could be seen as an important part of CEO Karen Magee's effort to refocus San Francisco-based PlanetOut on its core online business, including the sale last fall of the RSVP Vacations gay cruise company to competitor Atlantis Events. It's interesting to see Here moving in the opposite direction, expanding from on-demand TV to print media with an online component.
Time will tell which company is making the right bet financially, or whether PlanetOut is simply selling off its old media division on the way to making itself more attractive for a buyout -- something the company announced in January it was seeking. News of the sale improved PlanetOut stock price, up 18 cents (7.9 percent) to $2.45, a split-adjusted price.
For a quick history of PlanetOut and LPI, follow the jump:
January 26, 2008
A legal headache for PlanetOut
Posted by: Chris
The good folks at PlanetOut just can't catch a break. Fresh off of news that management is pursuing the sale of the company comes word of a bizarre lawsuit out of east Tennessee involving an angry father who claims his daughter opened a gay porn mailer from PlanetOut's softcore Specialty Publications division.
You can imagine how fair (not) the coverage of the lawsuit was on local TV:
Think about this. Your young son or daughter gets a big white envelope addressed to them. They open it, only to find homosexual porn. A Powell dad says it happened to him, and his daughter. He's mad and he's taking action. …
Kent Blackwelder and his attorney filed a lawsuit alleging Specialty Publications sent unsolicited mail with nude pictures inside to his daughter. Blackwelder says he wants to make the magazine company pay and make changes that could keep your family with having to deal with a similar problem.
(Video of the story, including grainy black-and-white of the flyer, is here.) Buried in the report are important details, like the envelope was addressed to the father, not the daughter and contained a clear warning of sexually explicit content in an interior envelope containing the flyer.
But Specialty Pubs, which publishes Men (previously Advocate Men), Freshmen, Unzipped and other softcore titles, may have given the Blackwelders just enough wiggle room to bring their ridiculous $3.8 million claim. It seems the exterior envelope was not labelled as well,something the father claims is required by U.S. Postal Service regulations.
Either way, this is one headache that PlanetOut doesn't need right now.
For related stories and breaking news, click or bookmark:
January 15, 2008
Soon to be no PlanetOut?
Posted by: Chris
The last we heard from the troubled gay media conglomerate PlanetOut, the news seemed mostly positive. The company's RSVP Vacations unit, which had been bleeding cash for months, was successfully sold off to competitor Atlantis Events. A cash infusion of $26.2 million had paid off looming creditors, and among the angels had been a certain Bill Gates of Microsoft fame.
But even as the Bay Area Reporter was reporting the "good news" two months ago, the company's stock was again taking a nosedive, perhaps anticipating another poor quarterly earnings report or perhaps because some larger investors saw the opportunity to cash out while they could.
Today, the San Francisco-based company announced it was suspending earnings forecasts and investor calls and has hired a consulting firm to help it find potential buyers. That could mean the company that brings us Gay.com, the Advocate, Out, Allyson Books and much much more could be gobbled up by a bigger (non-gay) fish, rescued again by a new set of investors or sold off in pieces.
If the latter happens, it would seem to signal the failure of a grand experiment, pooling the assets of some of the gay media's marquee names with the hope of creating through synergy something bigger and better than the sum of its parts. I know something about that sort of experiment.
Mergers in the gay media have stirred plenty of criticism, some justified but much of it uninformed. When the Advocate's publisher LPI bought Out Magazine, for example, the two magazines were put under the same editorial director Judy Weider and became essentially carbon copies of one another -- a problem that PlanetOut addressed and corrected with a publisher/editor shuffle last year.
During the dot.com heyday, PlanetOut seemed a bit too eager to spend it cash reserves on smaller gay companies when it wasn't entirely clear how the pieces of the company puzzle would fit together. The RSVP purchase practically sank the mother ship, partly due to some fluke logistical problems but also because it never really made sense for a media firm to own a cruise promotions company.
Even if PlanetOut is cut into smaller pieces, the real culprit won't be gay merger mania. The dot.com industry changed in ways few foresaw, and competing sites offered many of the same services that Gay.com members had been paying for. Even today, specialty media companies are struggling to adapt to new media, especially if management is old-media schooled.
Social networking sites remain a hot commodity, but like so much of the internet market, figuring out how to turn great ideas into a reliable revenue stream has proven a very tricky business indeed.
It's very unfortunate to hear this latest news from PlanetOut because the company seemed to be doing many of the things it needed to do to turn things around. This is one experiment I'm still hoping works out for all concerned.
July 02, 2007
PlanetOut finds cash just in time
Posted by: Chris
Correction: In my original post, I indicated the price per share paid by these new investors was 86 cents, but Barrons reports that the price was based on last Thursday's close -- still a discount but much less than I suggested.
The first business day after a June 30 deadline to come up with $7 million for creditors, PlanetOut managed to find three-times that amount, announcing the sale of $22.6 million in common stock to several private equity funds.
The details are here in the Gay News Watch report, but the company's cash salvation came at a heavily discounted price. Today's sale was set according to the closing stock price last Thursday, June 28, according to PlanetOut CFO Dan Miller. That price represents a fraction of where the stock stood as recently as January ($4.50) and its high the last 52 weeks ($7.95).
Even though the funds raised today are enough to meet the company's current financing deadline, as well as a second deadline of $8.5 million by the end of 2007, I expect PlanetOut will go forward with plans to sell SpecPub, which publishes soft-porn magazines like Men (formerly Advocate Men), Freshmen, 2X and Unzipped (formerly Advocate Men Classifieds).
On the one hand, SpecPub is one of PlanetOut's few profitable divisions amid a sea or red ink from Gay.com, PlanetOut.com, the Advocate, Out and (especially) RSVP Vacations. On the other hand, the company's president and CFO have said the adult business isn't a good "fit" with the rest of the company — has no one else seen all the X-rated profile pics on Gay.com? — which is probably code for caving in to national advertisers like Lexis who've said they won't buy into the Advocate and Out so long as SpecPub is part of the PlanetOut family.
More than anything else, the announcement today gives PlanetOut management a bit of breathing room to work through the problems plaguing the company and set it on a path to profitability. That may mean selling off RSVP as well, since the gay cruise company is an unlikely fit with the company's other media holdings.
Still, the biggest challenge PlanetOut faces isn't unique at all to the gay media company. Biweekly and monthly magazine titles like the Advocate and Out are facing massive competition from the Internet, which makes any attempt at news look stale by the time these publications hit the stands. What's more, Gay.com's dependence on paid-personals faces an even more direct challenge from sites like MySpace, Friendster, BigMuscle and RealJock that offer the same services for free.
The company refused to tell even its own reporter how sales are looking in the second quarter, so that information will come sometime in the next few weeks. But for today, at least, PlanetOut is back on more solid financial footing.
Click here for a complete news summary on PlanetOut, compiled by Gay News Watch.
May 22, 2007
PlanetOut free-fall watch
Posted by: Chris
TWO UPDATES: At the end of the post.
It's been just seven business days since I last posted about the free-fall in share price for Planet Out, Inc., and in that time it has dropped to a close yesterday of 98 cents, a loss of one-third the company's value in that short time.
Eric Savitz, who blogs for Barrons, pointed out yesterday that most of the damage came in the last two trading days:
PlanetOut (LGBT), which fell 20% on Friday, is down another 13% today, and still no updates from the company on its financial situation. The company, which provides web sites, print publications and travel services for the gay and lesbian market, has been more or less in free fall since reporting disappointing financial results earlier this month. The company is running low on cash, and has hired Allen & Co. to consider strategic options.
PlanetOut shares are down 15 cents today to $1, a decline of 13%. The shares are now down 78% for the year to date, 60% since its earnings report earlier this month and 31% over the last two days.
Savitz, who has been tracking PlanetOut's problems, reports that he was promised an interview with someone in the company's management, so perhaps the most recent serious decline will be explained soon.
In what is perhaps a telling display of the company's lack of focus, Magee told investors and reporters in a May 9 conference call that PlanetOut will sell off one of its few profitable divisions, the soft-porn magazine titles owned by LPI's Specialty Publications, in an effort to raise cash. Specialty publishes Unzipped, Men (formerly Advocate Men) and Freshmen magazines.
"It is a profitable one for us," Magee is quoted as saying about Specialty on the call, according to the Bay Area Reporter. "With that said, the adult business does not fit going forward with our other media properties."
As far as I can tell, one danger not immediately faced by the first gay company ever traded publicly in the U.S. is being delisted by Nasdaq. The stock exchange does require stocks to trade above a price of $1 per share, because below that amount even changes of a few cents represents a dramatic change in value. But the price must trade below $1 for 30 days and even then, the company is given 90 days to recover.
Still, an earlier post on Barrons, Savitz lays out the quandry raised by PlanetOut's impending cash crunch:
[Magee] said the company will require a capital raise or strategic transaction in the coming months. [JMP Securities analyst William] Morrison has some advice for potential investors: Don’t do it. “We continue to recommend that investors refrain from putting new capital to work in LGBT until we see evidence that its turnaround plan is working and the company raises additional capital.”
FIRST UPDATE: Barron's Eric Savitz is even more of a night owl than I am. In a blog post at 1:42 a.m. this morning, he relates the substance of his interview with PlanetOut's CFO:
In an interview Monday, PlanetOut CFO Dan Miller said the deep slide of the company’s stock … likely reflects sales by 1 or more of the company’s largest shareholders, rather than any specific new developments in its financial situation. It also may reflect the anticipated massive dilution from a capital raise of the size it has promised to seek.
Miller says the company is “moving as quickly as we can” to solve its financial issues. If it can’t find a way to raise additional funds, he says, PlanetOut “would be forced to approach the lender and work with them on what is best for all parties.” One possibility is that they would trigger a default on the debt. …
Miller notes that the company’s Gay.com URL is “incredibly valuable.” That may be true; what’s not clear is whether the company can raise enough cash to avoid having the site and the rest of PlanetOut’s assets sold off in a Chapter 11 fire sale.
As I post this update at 1:30 p.m. (Eastern time), LGBT is trading at 92 cents, a slight rally from a new record low price per share of 86 cents in early trading this morning.
SECOND UPDATE: The PlanetOut rally continued off and on until the closing of trading today, when the price per share was at $1.11, a 13 cent rise from yesterday's closing price of 98 cents. That small increase also represents a 13% increase in the stock value of the company in one day, demonstrating how volatile the stock can be when the price per share is so low.
Still, the news could be much worse. At least some investor(s) decided in the early afternoon that the record low represented an opportunity to buy PlanetOut stock at bargain basement prices and had enough confidence in the company as an ongoing concern to pony up. But if the analysts are right, it will take decisive action from management, and response from the financial community, for PlanetOut to truly rally.
May 10, 2007
PlanetOut going down?
Posted by: Chris
The stock price of Planet Out is reeling today from news yesterday of weaker than reported sales for the first quarter and a net loss of $6.6 million for the same period. The stock began the day at $2.25, already an all-time low for the company, which trades under the symbol LGBT on the Nasdaq. In the first 20 minutes or so of trading, the price had plummeted to $1.45 per share.
As I post, the stock has rallied a bit, to $1.62 per share — but still a loss of more than one-third its value just since yesterday's closing price. To put that in perspective, Planet Out was trading at $15 per share as recently as January 2005, and even $10 a year ago. The price began the year at $4.50 but had dropped to $2.49 per share by the end of the day yesterday.
Hopefully, the rally will hold. Whatever you think of PlanetOut and its shifting focus and publishing standards at the Advocate and Out magazines, the failure of the first-ever publicly traded gay business would be a blow to others who hope to repeat PlanetOut's early success.
Its two marquee print titles have already shown marked improvement under new editors since the departure of corporate editorial director Judy Weider. PlanetOut has already survived the dot-com bust; it would be a shame if it petered out now.
May 09, 2007
PlanetOut confirms sales fears
Posted by: Chris
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.
April 25, 2007
More bad news from Planet Out
Posted by: Chris
This just in, more bad news about Planet Out from the San Francisco Business Times:
Media company PlanetOut Inc. said Wednesday that it expects revenue from the first quarter ended March to be between $16 million and $17 million. Analysts had expected an average of $18.59 million.
The San Francisco company (NASDAQ: LGBT), which focuses on the lesbian, gay, bisexual and transgender communities, said greater than expected discounts on a Caribbean cruise package hurt its results, as did poor sales online and in print.
The news is likely to be poorly received on Wall Street, although the PlanetOut stock does not have much further to fall, having already dropped from $15 per share in January 2005, to $10 as recently as a year ago, to trading at $3.05 today, down another 15 cents since last Friday.
As if to rub salt in the wound, among the reasons given for the shortfall was $600,000 paid out to Jeffrey Soukup, who quit as president and COO earlier this month. The collapse of PlanetOut would be devastating to gay media generally, given holdings that include not just the websites Gay.com and PlanetOut, but the Advocate, Out and RSVP vacations.
April 21, 2007
Planet Out in a nosedive?
Posted by: Chris
They may snipe like silly schoolgirls, but the bitter queens at Queerty manage a few scoops now and then. This week, they reported on the continued decline in the stock price of Planet Out, Inc., which runs Gay.com, PlanetOut.com, the Advocate and Out magazines and RSVP cruises, among other gay ventures.
Like many dot.com ventures, PlanetOut has always struggled financially, and has made some wrong turns along the way to building the world's largest gay media conglomerate. Just how bad are things now? Queerty asked John Carney of Dealbreaker.com:
PlanetOut has a chart that's almost painful to look at. It's slid from highs a couple of years back around twelve bucks down to Vonage territory. The company has been chopped-down by Wall Street analysts, who have noted declining revenues from ads and travel biz. Mounting debt and insider sale last year probably don't help. It's not clear what the companies core business is. Is it a publishing company? A travel site? A web 2.0 portal? Investors don't like companies when they can't tell what it's supposed to be doing.
To make matters worse, at start of the year PlanetOut adopted a "Shareholder's Rights Plan" which is the phrase companies use to describe something better known as a poison pill. Basically, it's a device that prevents an outside shareholder from acquiring the company without the consent of the insiders. These things hold down stock prices because they make acquisitions less likely and discourage outsiders from acquiring substantial portions of the company. No one has ever successfully swallowed a poison pill.
Observers and critics have been predicting PlanetOut's demise for years now, and yet the company has managed to persevere and even grow despite all the doomsaying. I know something about the risks and responsibilities that gay entrepreneurs face when combining gay media with a long history of serving our community and the gay rights movement. I know that Lowell Selvin, who played a central role at PlanetOut until he resigned as CEO for medical reasons last year, shared that commitment.
But now Selvin is gone, and another key player, COO and president Jeffrey Soukup, resigned two weeks ago. Karen Magee, who took Selvin's place as CEO last June, hasn't yet managed to right the ship. In fact, from a stock price high of almost $15 in January 2005, and $10 as recently as a year ago, PlanetOut is now trading at $3.20.
Queerty posted again about PlanetOut on Thursday, with a breathless headline that "PLANETOUT IS TOTALLY CORRUPT" due to "insider trading." The basis for the claim was this link to an SEC filing that shows a number of top PlanetOut officials, especially former president Mark Elderkin, sold off a large number of shares last year. Queerty complains that the filing, called "LGBT Insider Trading" because "LGBT" is PlanetOut's stock symbol on the Nasdaq exchange, reflects poorly on all gay people.
Of course there's nothing inherently wrong with "insiders" buying, owning or selling their shares, unless they're doing so based on inside information unavailable to the public. The SEC filing is there to alert other investors about just what top execs and board members are doing with their shares because they know the company better than anyone. In the case of Elderkin, the original Gay.com founder left the company in 2006, so the sell-off coincided with his own departure. Hardly evidence PlanetOut is "totally corrupt."
Still, those interested in the future of gay media should mark their calendars for May 9, when PlanetOut will announce financial results from the first quarter of 2007.
