TheStreet.co.uk yesterday joined the growing number of dot.com casualties when the website's US parent closed the business to help protect its own financial position.
At around 3pm the UK website dispatched its final e-mail to users, replacing updates on events in the City with a farewell message: "It's another internet collapse." All 64 staff will lose their jobs, including editor Nils Pratley who had joined from Sunday Business.
The closure came after months of negotiations between management of the site and investors. The site had eaten its way through around £9.6m since launch in February and was burning £350,000 a month. It would have run out of cash at the end of the year.
Staff at the site were incensed. "People are furious with the US," said one. "We made every financial target they set us. We are particularly disgusted that no one from the US even turned up to justify or explain their decision."
In the grand tradition of Fleet Street, the majority of the staff made their way to the pub after the announcement, although with a dot.com twist, it was Smiths, a trendy bar in Smithfield.
Sources said venture capital investors led by Chase Capital Partners and Barclays Private Equity were keen to inject further funds but had been unable to agree terms with TheStreet.com, which held 63% of the venture.
TheStreet.com, under press-ure from its own shareholders, decided to buy out the UK investors for $3m and 1.25m shares, and close the site.
The move was part of a wider cost-cutting exercise at TheStreet.com, which announced 40 job losses from its US operation. Thomas Clarke, chief executive, said closure of the UK operations and the US job cuts would save about $18m a year. "In today's environment companies have two clear choices: chart a path to profitability or shut down. We're in this for the long haul."
Claudia Jay, managing director of the UK site, stressed that the closure would be orderly and staff would receive payment for their full notice periods plus a redundancy sum.
"I'm really, really sad because I'm immensely proud of what we have created. It was a really high quality site and had a lot of users who liked it."
Investors had come "very close" to doing a deal that would have provided funding to keep operating.
The UK site was making £200,000 a month in advertising revenues and £50,000 from other sources including syndication.
TheStreet.com believes the retrenchment combined with its $90m in cash will allow it to survive the downturn in internet stocks. Dave Kansas, editor-in-chief, said: "We believe this puts us in good stead to get through to the other side. It was a very difficult choice to make."
At yesterday's share price of just over $3, TheStreet.com was valued at $85.4m, less than the $90m in the bank at the end of the third quarter.
Few buyers have materialised since the company appointed Wasserstein Perella, the investment bank, to look for partners in January.
