Wannabe interactive guide and program provider Source Media hired investment banker UBS Warburg to evaluate its operations and sell or restructure the company.
Source is saddled with $119 million in debt, just $12 million in cash, and steady operating losses. The company was a favorite of short sellers, well before the tech stock crash, with some investors tremendously skeptical of the company's ability to develop a business out of its technology and plans for a Cityseach-like local information guide via interactive cable.
Support from MSO Insight Communications helped for a while, but the company and Insight sold the company's core technology to set-top software company Liberate for $172 million in stock. Insight got half the shares. But Liberate's stock collapsed and the stock is now worth just $15 million.
Source's stock was delisted from the Nasdaq National Market System and it now trades for less than 50 cents on the OTC Buletin Board. For a while it looked like Source's salvation might be an interactive program guide that works in the initial wave of memory-constrained digital set-top boxes and supposedly don't conflict with patents held by the litiguious Gemstar. But it is Worldgate that has lined up support for that product. - John Higgins