TheStreet.com (Nasdaq: TSCM) shares fell $1.16, or 19 percent, to $4.97 Wednesday after warning of disappointing sales in its third quarter.
The online financial news provider said that while its quarterly sales will fall short of previous estimates, it still expects to meet analysts' loss estimates in the quarter.
Company officials said the online financial news site will still become cash flow positive by the second half of 2001 and that it still holds more than $88 million in cash reserves.
"From a revenue standpoint, this is a disappointing quarter for TheStreet.com," said CEO Tom Clarke in a prepared release. "Unfortunately, our projections didn't account for the slower-than-anticipated implementation of our news distribution deals, and the impact of seasonality on advertising sales. These factors hampered our aggressive plans for page view and revenue growth."
On Wednesday, Thomas Weisel Partners cut the stock to an "outperform" rating from a "buy" while First Union Securities cut it from a "buy" to a "hold."
A survey of analysts by First Call Corp. predict TheStreet.com will lose 37 cents a share in its third quarter and $1.68 a share in the fiscal year.
Last quarter, it topped analysts' estimates when it posted a loss of $13.1 million, or 52 cents a share, on sales of $7 million.
In the quarter, it recorded 2.9 million average monthly users for its US sites, and 130,000 per month at its UK site. Average monthly number of page views at the company's US and UK sites was 42 million, up from the year-ago figure of 15 million.
Advertising and e-commerce revenue for the quarter was $4.6 million, up from $1.7 million in the year-ago quarter.
TheStreet.com shares peaked at $22.25 in October before falling to a 52-week low of $4.25 in August.
Five of the seven analysts tracking the stock rate it either a "buy" or "strong buy."