RealTime IT News

NetCreations' CFO Departs, Cites Personal Reasons

Opt-in email marketing service NetCreations Inc. said that chief financial officer Gary Sindler will resign from the company on August 15, to pursue personal interests in his native Baltimore.

The announcement triggered a ripple in the company's stock price, which closed Thursday at $50.88 but was down about 15 percent to $43 3/16 by noon on Friday.

The news follows the departure last month of NetCreations' president and chief operating officer Mitchell York. It was only January when York was appointed to the post, but, on June 2, he stepped down to assume the position of director. Chief executive officer Rosalind Resnick assumed York's duties, which she had performed before his appointment.

Although Sindler attributes his departure to personal reasons, the decision to leave, paired with York's departure, could point to an unstable management situation at the e-mail list manager and broker. This instability could potentially shake investor, and client, confidence in the company. Resnick, however, says the departures are wholly unrelated.

"There is no connection at all between Mitch's departure and Gary's departure," said Resnick. "There is nothing wrong with our company."

Resnick says York, who had been on NetCreations' board of directors before he took the president and COO job, had stepped in to help Resnick put together a stronger management team, after the company had its IPO.

"Once he helped me put together the management team -- and I consider it to be a very strong management team -- he decided to pursue other alternatives," said Resnick. "Mitch has long been a close advisor to the company, and he will continue to be."

In an interview with atNewYork.com, the latest to leave, Sindler, said he wants to devote more time to his fiancee and family. "I've been commuting for the last year and that doesn't do wonders for a personal relationship."

While Sindler admitted that the departure could be viewed as an indicator of a company headed for the rocks, he called NetCreations, which sells opt-in email lists for about 20 cents per name, a strong and solid company that has been making money from day one.

Its latest quarterly earnings are due to be released on July 20. "The day-traders heard the announcement and are nervous today," added Sinder. "But the institutional investors understand we have a solid company and that there's nothing wrong with our business model."

Robert Mattes, NetCreations' vice president of finance, will serve as interim CFO until a replacement is found. Mattes' spent six years in the audit practice at KPMG and four year in the insurance industry. Sindler said he will be available as needed after his departure. NetCreations' clients include Dell, J. Crew, Ziff-Davis and internet.com (internetnews.com's parent company), and the company has agreements with Web site operators like CMPnet and Regards.com to sign up users who wish to receive e-mail ads.