There could be a roll-up of two struggling digital media operations in the near future — if one investor in TheStreet.com and Salon Media has his way.
Now that the activist investor, Spear Point, has finally closed the deal to seize control of the board of foundering Salon Media, it is resetting its sites on Jim Cramer’s TheStreet.
“We do think there is room for consolidation, especially in the smaller end of the market,” said Ron Bienvenu, managing partner of New Orleans-based Spear Point, which has less than $100 million under management.
“TheStreet, I think, lacks compelling vision,” said Bienvenu. He holds just under 5 percent of the stock of TheStreet and is still smarting that his pick for a board seat, Lex Fenwick, a former top executive at Bloomberg and Dow Jones, last spring was disqualified on a technicality from a seat on the company’s board.
“We’re very frustrated,” said Bienvenu. “We don’t like it when the chairman runs the company like a personal fiefdom.”
Salon, meanwhile, held its first board meeting on Tuesday following a move by Spear Point on Friday to inject about $1 million into the struggling digital company to gain control of its board.
The equity infusion gave it 805,824 shares of preferred stock that are expected to be converted into 29 percent of common stock.
In addition to Bienvenu and Spear Point colleague Trevor Colhoun, the company added Dick MacWilliams, an ally from Vista Capital, as an outside director and chairman of the new board.
Interestingly, MacWilliams had sold Broadex to Slot Oyunları TheStreet two years ago and it is one of TheStreet’s best performing divisions.
John Warnock, the 76-year-old co-founder of Adobe Systems, stepped down from the Salon board. William Hambrecht, the octogenarian Silicon Valley investor who had 30 percent of the Salon stock, was reported to be staying on board.
George Hirsch, a former publisher of Runner’s World, is also stepping down from the Salon board.
Jordan Hoffner, who was installed as CEO of Salon Media in May, now has a seat on the board of Salon and is an investor as well.
“Jordan is driving the ship for us and we like his vision,” said Bienvenu.
Larry Kramer, chairman of TheStreet, said, “We announced a year ago a plan to clean up TheStreet and deal with a number of issues. We’re happy with where we’re going.”
Regarding a possible fight with Spear Point, he said, “We always listen to our shareholders, including Ron and the people at Spear Point. We’re watching Salon with interest.”
Neither of the digital pioneers hatched during the mid-1990s is performing particularly well. TheStreet hit a new 52-week low of 77 cents on Tuesday before rebounding to close at 82 cents a share, down 2.3 percent. Salon closed unchanged at 20 cents a share.
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