Geo Interactive Media says it will consider selling some parts of the company over the next two years to focus on its growth business of video streaming - the technology which sends video signals to PCs and mobile phones.
The company said yesterday it was also looking at a trade sale of 6% of its stock to a strategic partner. Shares in Geo tumbled 117.5p yesterday to £10.675, having peaked in March at just over £34.
Eli Reifman, executive director of Geo Interactive, said that the directors - who own a total of 55% of the Israel-based company - would not sell any further shares in the next year to "provide a comfort level" to the market. "We don't believe there should be any other selling now as we don't believe the share price is where it should be," he added.
The strategic partnership is expected to focus on Geo's mobile division which is developing video streaming technology for handsets.
Video streaming compresses video signals - for example coverage of an event such as Wimbledon - and transmits them at high speed to PCs or mobile phone handsets. Geo is widely considered to be a leader in two-way video streaming.
So far, however, Real Networks has dominated the market in video streaming to PCs. This week the American company announced that it had signed a deal with Nokia to target mobile phones - news which hit Geo's share price.Mr Reifman said that Geo was happy with current trading in all its divisions - mobile, broadcasting, messaging and web radio. First-half revenues had exceeded expectations and the cash burn was in line with the business plan.
Analysts have forecast a cash burn of between $1.4m and $1.6m in the first half and twice that for the full year. Geo is expected to make its first pre-tax profit in 2000 of $3.9m, on revenues of $25m.
Darren Lauber, an analyst with WestLB Panmure recommends Geo as a "buy" with a target price of £23. He said the company's ability to focus its strategy and the strength of management had seen revenues leap from $950,000 in 1998 to $7.5m in 1999.
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