Under Siege, San Diego’s Active Network Shuffles Leadership

Wow. The Active Network (NYSE: [[ticker:ACTV]]), the San Diego-based Web company that provides online registration and support for a host of recreational activities, is in the throes of a full-fledged corporate crisis.

In a statement yesterday, the company named former COO Jon Belmonte as interim CEO. Belmonte, who left the company at the end of 2011, succeeds Matt Landa, who served just over seven months as CEO—a period when the company has come under withering criticism. Dave Alberga, who served 13 years as CEO before shifting into a new role of executive chairman last September, also resigned as both executive chairman and as board chairman.

Shares of the Active Network hit a 52-week high of $16.85 almost exactly a year ago, on May 3, 2012. The stock hit a low of $3.83 on April 1, and shares of Active were trading today around $5 on average trading volume.

Much of the pressure has come from hedge funds and investors who have been betting since last year that Active shares are grossly over-valued. A scathing report issued last October from Prescience Point, a research firm that says its sole focus “is to conduct comprehensive fundamental research, and uncover companies that are engaging in fraudulent or misleading business practices” preceded a 46 percent plunge in the value of Active Shares, when the company posted disappointing results for the third quarter of 2012.

Prescience Point went even further in a lengthy attack that appeared in February on the investor website Seeking Alpha.

In yesterday’s statement, the Active Network said Alberga and Landa’s departures were not related to any disputes with the board or issues regarding the integrity of the company’s financial statements or accounting policies and practices. The San Diego Internet giant also disclosed selected preliminary financial results for the first quarter, saying revenue amounted to $106 million, a 12 percent increase since the same quarter last year. (Critics had been predicting the company would show no revenue growth.) The Active Network said it also had narrowed its net loss by 25 percent, to $15.2 million.

The company plans to release its full financial results after the market closes today, and is planning a conference call this afternoon that should be a doozy. A live webcast of the call can be accessed online through the company’s investor relations department.

Author: Bruce V. Bigelow

In Memoriam: Our dear friend Bruce V. Bigelow passed away on June 29, 2018. He was the editor of Xconomy San Diego from 2008 to 2018. Read more about his life and work here. Bruce Bigelow joined Xconomy from the business desk of the San Diego Union-Tribune. He was a member of the team of reporters who were awarded the 2006 Pulitzer Prize in National Reporting for uncovering bribes paid to San Diego Republican Rep. Randy “Duke” Cunningham in exchange for special legislation earmarks. He also shared a 2006 award for enterprise reporting from the Society of Business Editors and Writers for “In Harm’s Way,” an article about the extraordinary casualty rate among employees working in Iraq for San Diego’s Titan Corp. He has written extensively about the 2002 corporate accounting scandal at software goliath Peregrine Systems. He also was a Gerald Loeb Award finalist and National Headline Award winner for “The Toymaker,” a 14-part chronicle of a San Diego start-up company. He takes special satisfaction, though, that the series was included in the library for nonfiction narrative journalism at the Nieman Foundation for Journalism at Harvard University. Bigelow graduated from U.C. Berkeley in 1977 with a degree in English Literature and from the Columbia University Graduate School of Journalism in 1979. Before joining the Union-Tribune in 1990, he worked for the Associated Press in Los Angeles and The Kansas City Times.