We usually write about companies buying each other, but in this case, Hearst Corporation is going against the trend: it has sold its stake in Local.com.
“Hearst Corp., which earlier this year made a private placement investment in local search engine Local.com debt and warrants convertible into a 22% stake in the company, has apparently converted the securities into common stock and sold all of its share in the open market,” reports Eric Savitz for Barron’s Online.
That’s not great news for Local.com, which had been on something of a streak. First, the company was awarded a certain patent for “location-based” search; its stock shot up afterward. Local.com then showed off some enhancements to its mapping service. So far, so good.
And, to be honest, this latest development may not be the end of Local.com’s world. Savitz was able to write, “Local.com today is up 59 cents at $8.78,” and although the stock is now at $8.48, that’s not indicative of some catastrophic selloff.
It looks like we’re in another “sit and wait” situation, as neither Local.com nor Hearst leaped to explain the occurrence. But since nothing has changed within the company’s operations (that we know of), Local.com may escape seeing some negative effect.
UPDATE: The Barron’s article now states, “A previous version of this story incorrectly reported that Hearst had [sold] its entire stake, a conclusion I reached based on a filing on Form 4 which showed that Hearst held zero shares; apparently the zero referred only to the shares remaining in the 250,000 block of shares sold on July 12. I apologize for the error.”
