"Garlinghouse, general partner at CMGI's @Ventures, agreed, saying his firm's investment won't fund the operations of Information Management"
We are spun off from IMAA says buyingedge----read article TFF, tell me how IMAA will profit give you concede that buyingedge will not garner any profits, you seem to think that buyingedge is the first and only in this troubled sector, when in fact they are a trival also ran.
wolff
NEW YORK (Dow Jones)--Sometimes it's the giver, not the gift,
that really counts.
Just ask Information Management Associates Inc. (IMAA), whose
shares have soared 110% since it disclosed late Thursday that
a group lead by CMGI Inc.'s (CMGI) venture capital affiliate @Ventures
was investing $10 million in Buyingedge.com, an auction Web site
in which it holds a majority stake.
The $10 million consists of $7.5 million from @Ventures and
$2.5 million from Wand Partners, Amicus and Madrona Investment
Group. In exchange for their cash, the venture funds received
preferred stock representing about 29% of buyingedge.com's fully-diluted equity.
In its quarterly earnings release, Information Management describes
buyingedge.com as "a majority-owned subsidiary" and discusses
other financing secured recently by the money-losing parent company.
But the $10 million infusion is for the exclusive use of the
Internet startup and isn't available to the parent company, according
to Information Management's latest filing with the Securities
and Exchange Commission,
"The $10 million is to be used solely to fund the activities
of buyingedge.com," the filing states. Brad Garlinghouse, general partner at CMGI's @Ventures, agreed, saying his firm's investment won't fund the operations of Information Management.
Garlinghouse said buyingedge.com has effectively been spun
off from its parent - it will relocate to Redmond Shores, Calif.,
from Shelton, Conn., and has its own board and equity structure
- so "to call it a subsidiary is a stretch."
"I think (Information Management) IMA wanted to make sure people
were aware they are a major owner of this new legal entity, which
from my point of view is a separate company," Garlinghouse added.
Gary Martino, Information Management's chairman and Buyingedge.com's
new chief executive, said buyingedge.com has essentially been
spun off. But Information Management remains its largest investor
- with about a 71% stake - and its quarterly results will still
be reflected in the parent company's financial reporting, Martino
said.
Because of its ownership stake, Information Management would
enjoy a financial windfall if the Internet venture, which currently Page 3 / 4
offers its services for free, succeeds and goes public, Martino
added.
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