Since it first hit the online street back in 1996, TheStreet.com (Nasdaq: TSCM) has been a media favorite in offering financial news with attitude. Unlike many of its bottom line, straight-faced competitors, TheStreet.com seems to revel in lacing its comprehensive financial news with witty commentary, bombast and bluster and occasional irreverence.
The company is surely hoping that the media accolades spill over to the financial community Tuesday, the ground zero day for its initial public offering. It’s offering 5,500,000 common shares at $19 (US$) per share in an effort to raise $59 million to finance its future.
TheStreet.com’s need for money is well-documented. In an April filing with the SEC, it said it has lost $20.8 million since its inception and forecasts operating losses through this year as well. The company says that the IPO money will go into operating costs and it will not pay a dividend in the forseeable future. As with many of the Internet’s commerce sites, accolades do not neccessarily translate into cold hard cash.
Quality costs, and that’s one of the main reasons the online publication has been bleeding money. TheStreet.com didn’t hire recent journalism school graduates to put together its content. Instead, it went out and got seasoned financial reporters and acclaimed columnists, some 50 editorial staff in all.
Columnists James Cramer and Herb Greenberg are widely-held as two of the best in the business. As the Fortune Technology Buyer’s Guide said, “Skip Starbucks and go straight to one of Cramer’s rants to get the blood flowing in the morning.”
In its SEC filing, the company stressed the importance of retaining a top-notch editorial team, saying that its subscribers would not likely part with the $99.95 annual subscription price if their editorial standards slipped. Cramer is under contract until 2003, Greenberg until 2001.
The publication’s subscriber base is currently 51,000, up from 32,000 last December. The jump was the result of a marketing blitz to spread TheStreet.com gospel. In December 1997, there were only 6,700 subscribers. Clearly, the word is getting out.
In addition to reaching out to potential subscribers, TheStreet.com has been forming media alliances. Earlier this year, the company signed memos of understanding with the New York Times to create a separate jointly-owned newsroom and provide cross-promotion and with Rupert Murdoch’s News America Corp. to co-produce a television show for cablecasting on the Fox Network.
It syndicates its content to Yahoo!, America Online and Intuit and has worked out subscription distribution deals with E*Trade and DLJ Direct, which allows those company’s customers to subscribe to TheStreet at a discount rate.
Now, to make the leap to the next step, TheStreet is hoping that the street — Wall St. — will react as positively to their pitch for money as they have to their sterling editorial content.