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SoftBank rescues the struggling company that had once been an early pioneer of Internet payments
With its stock price plummeting from a high of $9.25 per share last year to less than $1.00, the future looked dim for San Diego-based First Virtual Holdings, Inc. But even as the company grumbled that its operations might not survive, it was hammering out a deal with the ubiquitous SoftBank Holdings Inc., which agreed to purchase 10 million shares of First Virtual at a bargain basement price of 60 cents per share.
Though analysts like Deutsche Morgan Grenfell's Bill Burnham call the deal a "fire sale," the two companies make a good couple: SoftBank is a deep-pocketed holding company known for its Internet commerce and marketing prowess, and cash-strapped First Virtual offers the innovative Interactive Messaging Platform (IMP).
If approved by stockholders, the $6 million agreement will provide First Virtual with the cash it needs to bolster its Internet commerce initiative, specifically IMP. IMP is the vendor's email based direct marketing application. The application includes the ability to initiate payments within email messages. This technology, however, is a bit of a different tack from First Virtual's original Internet payments product, VirtualPIN. This charge is noted by Burnham as one contributor to the plunge in First Virtual's stock price.
Earlier this year, as its stock prices slid from an all-time high, First Virtual claimed that a cash...