We had been getting tips on this for a while, especially as TheStreet.com’s own financial results were getting delayed due to discrepancies in recording revenues from its Promotions.com business. Turns out, the financial news company has sold off the online marketing business it bought two years ago for almost $21 million. The buyer is an investor group consisting of managers of the Promotions.com business, and the price isn’t pretty: a total of $3.1 million, out of which there is $1.0 million in cash and notes of about $2.1 million.
The specifics of the deal, as outlines in TSCM’s SEC filing:”The notes are payable in six equal monthly installments commencing April 1, 2010. The Company was granted a security interest in the securities and assets of the Promotions.com business until the notes are fully paid, and one of the notes (with a principal amount of $0.3 million) is guaranteed by the principals of the Purchaser. In the event that, prior to December 18, 2011, there is a change in control of the Purchaser or all or substantially all of the assets of the Promotions.com business are sold, among other events, for consideration (as defined therein) in excess of the Sale Price, the Company will be entitled to receive an additional payment from the Purchaser, equal to 50% of such excess if the event occurs on or before December 18, 2010 and 25% of such excess if the event occurs after December 18, 2010 and prior to December 18, 2011.”
This comes at the same time TheStreet.com (NSDQ: TSCM) acquired a small mobile and interactive marketing company Kikucall, for about $1.75 million, which we first reported last month.
Also in the filing, the company mentioned that it has bought an unnamed subscription marketing services company, for about 647,901 TSCM shares. Likely it will use the acquisitions to bring more subscribers to its various premium newsletters and services.