Shopping.com's CEO Resigns In a Bid to Win Nasdaq Listing
By JOHANNA BENNETT
Dow Jones Newswires
When Shopping.com went public last November, founder Robert
McNulty's checkered past prevented the Internet retailer from trading on the Nasdaq Stock Market.In 1995, Mr. McNulty settled a case -- without admitting or denying guilt - involving allegations that he failed to disclose certain intercompany
expenditures between a group of firms for which he served as chairman.
The allegations were a key reason why Shopping.com was unable to win a
listing on Nasdaq SmallCap market at the time of its public offering. Its stock now is quoted on the OTC Bulletin Board service.
Nearly seven months after going public, Shopping.com again needs to
raise capital, this time to ensure its continued growth and survival. But because its shares still trade on the OTC Bulletin Board -- an loosely regulated market that is home to many small, risky securities --
the
company could have difficulty attracting institutional investors.
So Mr. McNulty made a decision: He resigned.
Almost two years after founding Shopping.com, Mr. McNulty announced
Friday he was resigning as chief executive and president, as well as giving
up his seat on the board. It's part of a deal that will see Shopping.com buy
out his five-year contract, set to expire in 2002, for an undisclosed
amount.
The decision, Mr. McNulty said, was his own idea. He said his resignation
wasn't connected to a U.S. Securities and Exchange Commission
investigation earlier this year into allegations of stock manipulation.
"No has asked me to leave -- not even close to it," Mr. McNulty said.
"The board did not want me to leave. I just want to. I do not want there to
be any impediment to this company. It has a chance to be a major, major
player in the retail market."
One member of Shopping.com's board described Mr. McNulty's decision
to resign as a selfless act. "I think he made a very gutsy and intelligent
decision," said Frank Denny, board member and chief executive of Group
InterCom, a San Antonio, Texas, consulting group. "I think he, in a sense,
looked at the company being more important than himself."
Another board member simply saw it as "pragmatic," considering Mr.
McNulty's standing as Shopping.com's largest shareholder, with 1.3 million
shares. "His interest lies with the best interest of the company," said board
member Paul Hill. "He wants to build the company, and, if he sees any
obstacle in the way, [he has] the will to remove those obstacles."
Mr. McNulty is not the first Shopping.com official to leave the company
this year. Former Chairman Bill Gross resigned in April with
Shopping.com at the center of a firestorm of allegations by short sellers
charging the company's underwriter with stock manipulation.
Mr. McNulty said he first contemplated giving up the positions last year,
before either Mr. Gross's departure or the SEC investigation. "Talks" with
his replacement, John H. Markley, were initiated in January, he said.
But Mr. McNulty hasn't completely severed his ties with Shopping.com.
Mr. McNulty said gave other board members power over the voting rights
to his shares, a move that appears to leave him with no official say in how
the company is governed. But Mr. McNulty confirmed that he has been
retained as a paid consultant to assist in the development of long-term
strategy, for an undisclosed fee.
Mr. McNulty and board members insist that Shopping.com is a viable,
growing business that's well-positioned to take advantage of the ongoing
e-commerce boom.
He shrugged off the SEC investigation as "a yawn for the SEC." In fact,
Mr. McNulty insisted that the company probably could attain listing on
Nasdaq even if he chose to stay on.
But he doesn't plan to reverse his decision, he said. Nor does he have any
plans to return to the company and resume his role as a corporate officer.
"I am a lot different than most CEOs," he said. "I have a tremendous desire
to succeed. I am not a corporate type. I have never been. The thrill is
starting the company in the first place."
|
