WorldGate Communications appears to be in a world of hurt after the interactive television company disclosed late Friday it had hired a financial advisor to evaluate "various strategic and financing alternatives."
Among those alternatives, WorldGate is seeking a proposed distribution to shareholders to purchase more shares of the iTV company's common stock.
WorldGate retained Boston Corporate Finance Inc. because "we believe that working with an investment banking firm to help the company's management and board of directors explore various alternatives is in the best interest of our shareholders and will help us maximize shareholder value," company Chairman and CEO Hal Krisbergh said, in a release.
WorldGate shares, which moved to the Nasdaq Small Cap index on January 9, were down 1 cent to 39 cents apiece in early trading Monday.
Flagging support for iTV services among cable operators has hindered growth at WorldGate. As of Sept. 30, 2002, WorldGate had deployments in 66 cable systems, representing 600,224 revenue generating units, according to a 10Q the company filed in November 2002. WorldGate had deployments in 59 cable systems at that point in 2001.
WorldGate also disclosed at the time that it had enough cash and short-term investments to fund operations for another three to four quarters. That would get it to about the third quarter of 2003.
The recent events surrounding WorldGate is but the latest in a chain that is quickly changing the face of the iTV sector. Consolidation is rampant, witnessed by Liberty Media 's recent acquisitions of companies such as OpenTV Corp. and Wink Communications.
Others have looked outside of a pure iTV play to find their fortunes, including Liberate Technologies, which purchased OSS company Sigma Systems last year.