Sale of PC Quote service nixed
Negotiations to sell its core business fizzle for the provider of online, real-time stock and market quotes.
The company said it will undertake a "substantial" cost-reduction plan, as it continues negotiations with its strategic partners.
PC Quote and Track Data officials were not available for comment late this afternoon.
PCQuote, faced with a $1.9 million net loss and virtually flat revenues of $4.1 million in the first quarter, had announced in April that it planned to sell its non-Internet-based quotation business to Track Data, which provides real-time financial data, research, charting, and analytical services to institutional and individual investors.
Under the deal, valued at $1.3 million at the time of the announcement, Track Data was to give PC Quote up to 750,000 of its shares and 50 percent of pre-tax earnings of the non-Internet business for three years. That segment represents about $10 million per year.
Track Data was also scheduled to assume some of that business's debt.
Without the Track Data deal, PC Quote is suffering from a cash crunch that will inhibit its ability to fund further growth.
During the quarter, PC Quote posted an operating loss of $1.7 million, compared to operating income of $327,148 a year earlier. Also, the company posted net profits of $304,778 a year earlier, on revenues of $4 million.
PC Quote has been hit with the loss of two key accounts and transition in its product mix.