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
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
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
. 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
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 [email protected].
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Edgar Online Adds Insider Info