TheStreet (TSCM) Continues To Clean House

Earlier this month, TheStreet.com, Inc. (NASDAQ: TSCM) announced that Thomas J. Clarke, Jr., its CEO and a Director for the past ten years, was released from his Chief Executive position. This time, we are hearing that TheStreet.com let go its Chief Revenue Officer and Mergers and Acquisitions officer, Steve Elkes. Elkes was responsible for the TheStreet.com's acquisition strategy and selling off some of its assets, which apparently TSCM was unsuccessful at doing. Investors have obviously been unhappy with TSCM's acquisition strategy over the past couple years, as the stock has fallen quicker than the price of a Miami condo.

Steve Elkes joined TheStreet in March 2007. When he arrived at the company, he was supposed to find new revenue opportunities and potentially buy synergistic companies. His first acquisition occurred only a few months later in August, when Elkes acquired Corsis Technology or Promotions.com. Promotions.com is an online promotions agency that implements online promotion campaigns for some of the largest brands. The purchase price of the acquisition was approximately $20.7 million. Although, TheStreet.com utilized the Corsis tech people to build its current version of its site, it appears Promotions.com hasn't lived up to Elkes lofty expectations. Obviously, companies cutting their advertising budgets over the past couple years did not help this business.

Only months later, on November 2, 2007, TheStreet.com bought Bankers Financial Products Corp, or BankingMyWay.com. BankingMyWay.com offers pricing information on CDs, checking/saving accounts. Elkes paid approximately $25.4 million for BMY. This company appears to be more synergistic with TheStreet.com and could prove to be a long-term, profitable asset.

On a positive note, Steve Elkes was successful in raising cash for TheStreet before the market soured. He raised over $50 million from Technology Crossover Ventures at very favorable terms for the TheStreet.com.

Personnel Changes
Since late 2008, several directors and executives have departed from the board and the company.
On October 20, 2008, Jeffrey M. Cunningham resigned as a director. On January 8, 2009, Jay Hoag resigned as a director of TheStreet.com. Mr. Hoag had served as the director designee of TSCM's Series B Preferred, as he is a General Partner at Technology Crossover Ventures who gave TheStreet the $55 million cash infusion.

Daryl Otte, who has served as a Director of the Company since 2001 was appointed the interim CEO effective March 21, 2009. In connection with his service as interim CEO, TSCM will be paying him a monthly consulting fee of $59,792.

Along with Otte becoming CEO, Jim Cramer took over Thomas Clarke's position as Chairman prior to the dismassal of Clarke.

On top of the management changes, some of its popular writers have left the company and TheStreet reduced its headcount by 11% in 2008 and laid off 6% of its workforce this year.

TheStreet requires some changes be it in personnel or company direction and it appears that Otte is moving swiftly in his short time at the company helm. It will be interesting to see what else Daryl Otte has in mind for TheStreet.com this year, but from the dismissal of Elkes, it appears there won't be any sacred cows at TSCM.

You May Also Be Interested In

• Takeda names Julie Kim as president and CEO after shareholder vote
• BNY Mellon fund boards retain seats after defeating dissident nominee
• Cal-Maine Foods adds two independent directors, expanding board to ten