Struggling PopMail.com Sheds Weight
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In a scramble to maintain a path to profitability, fan club marketing firm PopMail.com Inc. Wednesday sold its high-end newsletter provider IZ.com to a management-led investor group called JBII for a $2.25 million promissory note.
The protective measure follows last week's reduction of expenses at its wholly-owned subsidiary PopMail Network, based in Irving, Texas. An additional amortization charge of approximately $36 million will be recognized.
PopMail.com Chief Executive Officer Gary Schneider said in a company statement Wednesday that IZ.com, which creates newsletters and e-business applications for high-end companies, was growing too slowly for PopMail.com to continue to support it.
"It is our plan to be cash flow positive as soon as possible and as indicated in previous announcements the company will no longer support any business opportunities that are still in development or not cash positive," Schneider said.
On the heels of that announcement, the firm also said it had been granted a hearing in front of the Nasdaq Listing Qualifications Panel to address the issue of its ailing stock.
PopMail.com currently trades at 25 cents, a full 75 cents under the minimum it promised to operate under over the previous 30 consecutive trading days as required by Marketplace Rule 4310 (c)(4). PopMail.com had previously been granted 90 calendar days, or until Dec. 12, 2000, to regain compliance with the rule for continued listing.
The firm said there can be no assurances the panel will grant the Company's request for continued listing.
PopMail.com, which hopes to stay afloat through the generation of additional revenues and member registrations through cross-marketing initiatives, said it would not be averse to divest itself of other fan club and e-mail services.
Top clients include the NBA, Ticketmaster and the New York Yankees.