Stan Lee Media Latest Company to Feel the Dot-Com Crunch
By Gary Gentile
Associated Press Staff Writer
LOS ANGELES (AP) - The creator of Spiderman and the Fantastic Four found a villain even his fabled creations couldn't beat: the markets.
Stan Lee Media Inc., out time and money, laid off 140 people at its Encino, Calif. headquarters as it struggles to find new financing.
The company, named for the man who created The X-Men, The Avengers and other comic book heroes, had secured bridge financing of $2.2 million and an equity line of up to $40 million. But the agreements were contingent on the company's stock price, which fell below $1 a share last week.
On Monday, trading was halted on the Nasdaq when shares fell to 13 cents.
"The market put us in a very vulnerable position," John Cassell, director of special projects and one of the few remaining executives at the company, said Monday, before trading was halted. "What would have been routine financing was affected by these strange market conditions."
Cassell said the company was not folding and that executives remained optimistic that a market can be found and financing secured to back the creative talents of Lee.
"The key is that Stan Lee is the creative backbone of this company and regardless of the challenges that have come upon us, he remains as a viable force," Cassell said.
Cassell said the market may have painted his company with a broad dot-com brush, punishing it because part of its operations were on the Internet.
Unlike some companies that began on the Web and derived most of its revenue from online advertising and e-commerce, Cassell said Stan Lee Media was more diversified, with deals still in the works for motion pictures, amusement park rides and more.
"The company began initially using the Internet as a launching point," he said. "There may have been some latent stigma that affected our stock price, even though we are not remotely a dot-com company. The actual revenue model revolved around licensing and merchandising. No one here was trying to monetize the Net."
Cassell said the company would continue to operate and try to find new financing.
Another ambitious Web enterprise shut its doors over the weekend.
AntEye.com tried to discover new filmmakers and finance full 30-minute pilots of original ideas to market to television networks, movie studios and elsewhere. The 8-month-old company laid of its 20 full-time employees when it failed to secure new financing.
"What we needed more than anything else was time," Matti Leshem, chief executive officer, said Monday. "Go tell someone who is starting a magazine that 'You have eight months.'
Leshem said AntEye is like many companies that have either cut staff, merged or folded since dot-com stocks began to plummet in mid-April.
"If this was prior to April, we'd be going to IPO right now and be worth hundreds of millions of dollars," he said.
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