Priceline.com’s shares tumbled 38% after news that two of its licensees were folding.
Perfect YardSale, vendors of second-hand goods, and WebHouse Club, which sold discounted groceries and gasoline, both vowed they would deliver full refunds.
Jay S Walker, founder of WebHouse Club, blamed “the weakness of the current capital market environment” for the company’s inability to move into the black. Launched last year, it had attracted funding from Vulcan Ventures and Goldman Sachs.
Priceline, whose stock plummeted into single figures recently, promised to review its Q4 operations in light of the loss of the two licensees. Although it will not have to support their costs, Priceline will lose out on royalties worth $361,000 in Q2.
News source: Advertising Age - Interactive Daily