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StarMedia slides ahead of 3Q report

    StarMedia Network shares fell $1, or 16 percent, to $5.13 Monday ahead of the Latin American Internet portal's third-quarter earnings report.

    First Call Corp. consensus expects StarMedia (Nasdaq: STRM) to lose 59 cents a share in the quarter.

    Its shares have lost more than half their value in the past two months after it announced that it would cut 125 jobs and take a $4 million charge in the quarter.

    Earlier Monday, El Sitio (Nasdaq: LCTO) and Ibero American Media Partners (IAMP) announced they will merge, creating a content company for Spanish and Portuguese speakers.

    The combined entity, Claxson Interactive Group (CIG), will be the first publicly traded independent content company in Latin America.

    IAMP is a joint venture of the Cisneros Group of Companies and Hicks, Muse, Tate & Furst Inc. (Hicks Muse), the parent company of Cisneros Television Group. El Sitio is an Internet media company providing interactive content for Spanish and Portuguese speakers.

    StarMedia shares, which hit a 52-week high of $61 in February, fell to a low of $4.69 earlier this month.

    Last quarter, StarMedia beat analysts' estimates when it posted a loss of $44 million, or 67 cents a share, on sales of $13.8 million.

    Nine of the 11 analysts following the stock rate it either a "buy" or "strong buy."

    Analysts are forecasting a loss of $2.33 a share in the fiscal year.