RealTime IT News

Edgar Online Adds Insider Info

Edgar Online poked its head out from under the beleaguered online financial patch to announce plans to acquire InsiderTrader.com. While terms of the deal were sketchy, I crunched the numbers to be somewhere in the neighborhood of $1 and $3 million in EDGR stock. The site's founder will also come aboard as VP of corporate sales and product development.

As near as I can tell, this is the first land-grab for Edgar Online in more than a year. During the summer of last year, just a month removed from its public offering, the company scooped up its most formidable rival, FreeEDGAR for $11 million in stock (now worth closer to $4 million). The FreeEDGAR buyout was a no-brainer acquisition because, quite frankly, the privately-held start-up boasted a far better site and free service than its suitor at the time. Some might say, still does.

The long silence between acquisitions might have something to do with Edgar Online's sagging share price. The financial services upstart hit the new issues market back in May 1999 with a modest $40 million offering, just a month following TheStreet.com's darling debut. While James Cramer eagerly dined on his fifteen minutes, investors all but neglected to stop by the Edgar Online household with the 'welcome to the neighborhood' wagon. Despite being a solid niche player, the newcomer never quite managed to curry favor with retail investors, and has traded sideways ever since.

While InsiderTrader.com offers semi-free insider information, competing with the likes of bellwether finance resources Yahoo! Finance and MSN Investor, the real standout from this latest acquisition announcement may be the dot-com's struggling Silicon Alley-based parent Individual Investor Group . The firm publishes the monthly personal finance rag Individual Investor and has been involved in a high-profile soap opera surrounding rumors of its looming bankruptcy.

Individual Investor's tale of woe makes front-page news because the company's founder and CEO is Jon Steinberg, incidentally married to everyone's favorite CNBC money honey, Maria Bartiromo. His father Saul is also a flamboyant former billionaire who recently fell on rough times after some risky investments in once-sexy new economy stocks. Normally, the tycoon would have written a blank check in a New York minute to bail his entrepreneurial son out of hot water, but the wallet's a little light at the moment.

By mid-summer this year, following a wild roller coaster ride in the stock market, Individual Investor unveiled plans to hire an investment banking firm to examine strategic alternatives - market-speak for going-out-of-business. Since then, the company has been shopping its assets around to potential buyers in an effort to raise some badly needed cash.

So, is the InsiderTrader buyout a good deal? Well, the bounty for one of its flagship online properties probably wasn't quite what Individual Investor was hoping for. But desperate times call for desperate measures, and beggars can't be choosers. For Edgar Online, the price paid sounds fairly reasonable and the company should be able to effectively leverage the popularity of insider info with armchair investors to boost the foot-traffic to its buffet of existing offerings. Now the only question that remains unanswered is, who will buy Edgar Online?

Any questions or comments, love letters or hate mail? As always, feel free to forward them to kblack@internet.com.

Want my daily missives delivered with your morning toast and coffee? Sign up for my DealTracker