Online fan club and e-mail marketing company PopMail.com Inc.,
its stock now below $1 a share, is implementing a drastic turn-around strategy, cutting staff, doing a reverse stock split and putting its restaurant division on the block.
Over the past two months, PopMail said it has implemented a cost reduction plan eliminating 15 positions in the Internet division, representing 25 percent of the staff there with an estimated cost savings of $300,000 per month.
The company also announced the reverse stock split for shareholders of record on Oct. 11 in a move to attract additional market makers and investors. The stock closed yesterday at 50 cents a share, near its all-time low of 34 cents a share. Its 52-week high is over $7.
In addition, the company said it plans to pursue various financing strategies and capital restructurings that includes a unit exchange with its shareholders comprised of one share of common stock and a warrant to purchase all or a portion of a share of common stock in exchange for each share of common stock held.
PopMail offers a branded, Web-based fan club e-mail service that allows companies to offer their visitors free e-mail boxes on their home pages. It also operates Fan Asylum, a fan club marketing company,
In mid-September, PopMail signed a letter of intent to sell its Cafe Odyssey restaurant division to the restaurant division’s executive management. The company currently operates two restaurants, one in the Mall of America, Minnesota, and one in the Denver Pavilions in downtown Denver.
“Our Internet division has multiple, recurring revenue streams that have shown triple digit quarter-to-quarter growth since inception,” said chief executive Gary Schneider. “At the present rate of improvement, the Internet division is approaching a point of break even on a cash flow basis and we project that the company will generate cash flow from operations by the middle of 2001.”
Meanwhile, Stephen King resigned as chairman of the board. Schneider said that King has worked to transition the company from a restaurant company to an Internet company.
Tim McQuaid, the president and founder of subsidiary Fan Asylum, will be joining the board and a new chairman will be sought.
PopMail.com serves clients that have a great affinity with their fans — listeners, viewers, readers, subscribers, and customers. Its services allow clients to interact with their fan’s passions and interests in four affinity-based industries: music, sports, broadcast and entertainment. Subsidiaries include PopMail Network, Iz.com and Fan Asylum.