Under Siege, San Diego’s Active Network Shuffles Leadership
Wow. The Active Network (NYSE: ACTV), the San Diego-based Web company that provides online registration and support for a host of recreational activities, is in the throes of a full-fledged corporate crisis.
In a statement yesterday, the company named former COO Jon Belmonte as interim CEO. Belmonte, who left the company at the end of 2011, succeeds Matt Landa, who served just over seven months as CEO—a period when the company has come under withering criticism. Dave Alberga, who served 13 years as CEO before shifting into a new role of executive chairman last September, also resigned as both executive chairman and as board chairman.
Shares of the Active Network hit a 52-week high of $16.85 almost exactly a year ago, on May 3, 2012. The stock hit a low of $3.83 on April 1, and shares of Active were trading today around $5 on average trading volume.
Much of the pressure has come from hedge funds and investors who have been betting since last year that Active shares are grossly over-valued. A scathing report issued last October from Prescience Point, a research firm that says its sole focus “is to conduct comprehensive fundamental research, and uncover companies that are engaging in fraudulent or misleading business practices” preceded a 46 percent plunge in the value of Active Shares, when the company posted disappointing results for the third quarter of 2012.
Prescience Point went even further in a lengthy attack that appeared in February on the investor website Seeking Alpha.
In yesterday’s statement, the Active Network said Alberga and Landa’s departures were not related to any disputes with the board or issues regarding the integrity of the company’s financial statements or accounting policies and practices. The San Diego Internet giant also disclosed selected preliminary financial results for the first quarter, saying revenue amounted to $106 million, a 12 percent increase since the same quarter last year. (Critics had been predicting the company would show no revenue growth.) The Active Network said it also had narrowed its net loss by 25 percent, to $15.2 million.
The company plans to release its full financial results after the market closes today, and is planning a conference call this afternoon that should be a doozy. A live webcast of the call can be accessed online through the company’s investor relations department.