New York, Sept. 15 (Bloomberg) -- Quepasa.com, an Internet site targeting Hispanic Americans, has seen its stock price slide 30 percent since its first day of trading three months ago, and its quarterly losses have almost doubled.
Don't worries, says Chief Executive Gary Trujillo, who plans to keep spending $1.5 million a month on advertising and trying to convince Wall Street that his nine-month-old, Phoenix, Arizona- based site has a bright future.
``We can go another two years' at the company's current rate of spending before requiring additional cash, he said in an interview in New York.
``Our whole focus is on the U.S. Hispanic market,' Trujillo said. ``It is a market that has been underserved, overutilized and overlooked.'
Trujillo was in New York in part to announce that Quepasa has a new spokeswoman and partner: singer Gloria Estefan, whose bilingual singing career has made her a role model for Hispanic Americans. Estefan received an equity stake of about one percent of the company as partial payment for appearing in Quepasa ads and helping market the company.
Part of the problem with Quepasa's stock price, Trujillo said, is that investors keep comparing it with Latin American web sites such as Starmedia Network Inc., Yupi.com and El Sitio.
``They are definitely going after our market, but they are focused on Latin America,' he said. ``They bleed over to the U.S. market. We bleed over to Latin America.'
Quepasa also competes against English-language World Wide Web sites, said William Landers, an analyst at Lehman Brothers in New York.
``The U.S. Hispanic market can be more competitive than the Latin American market because most U.S. Hispanics are comfortable surfing the web in English, but they also have a higher per capita income than Latin Americans, and you can get higher advertising revenue.'
Few Ads
Still, Quepasa is yet to show significant advertising revenue, and its stock price could suffer further if its third- quarter revenue doesn't pick up, Landers said.
Trujillo said ad revenue isn't important. ``The e-commerce opportunities is where we will make most of our money.'
Total revenue in the quarter ending June 30 was $16,562, versus operating expenses of $9 million.
Quepasa, whose investors include Spanish-language television broadcaster Telemundo Group and Jerry Colangelo, owner of the Phoenix Suns basketball team, sold 4 million shares for $12 each on June 24. The share price soared to 17 1/8 on its first day of trading, and has since dropped to 11 9/16.
The IPO was managed by Cruttenden Roth Inc. Trujillo said ``we are always ready' for a second share sale, adding ``we are keeping our options open' on what bank would manage that sale.
He also said Quepasa would consider selling the company to a strategic buyer, adding that a merger with a U.S. Internet provider such as America Online Inc. ``would add value' to both companies.
Sep/15/1999 10:22 |
