Actua: New name for a company with fresh hopes

Joseph N. DiStefano, The Philadelphia Inquirer

By Joseph N. DiStefano, The Philadelphia Inquirer
McClatchy-Tribune Information Services

Sept. 05--Internet Capital Group, a Radnor-based, publicly traded investment firm, was briefly worth $50 billion as the dot.com frenzy made its stock value soar in 2000. Its value crashed to less than $200 million two years later, as investors realized the start-ups it backed lacked online profits, sales, and customers.

It may have missed the Internet's big profits, but the company -- still headed by founder, CEO, and chairman Walter "Buck" Buckley and his boom-years lieutenants, president Douglas Alexander and chief financial officer Raymond Kirk Morgan -- is back from the near-dead:

Shares briefly topped $20 earlier this year for the first time since the collapse, and traded recently in the high teens, for a market value of more than $700 million.

The company, seeking a symbolic break with the past, changed its name Wednesday to Actua. It happens in advance of a Sept. 24 investors meeting in New York that management hopes will "serve as an opportunity for investors to dig into the story in more detail," writes Kirk Materne, an analyst at Evercore Group L.L.C. in New York, in a report to clients.

Actua owns investments in three companies: Bolt Solutions, a New York auto- and home-insurance software developer that has the auto insurer Progressive Corp. among its clients; GovDelivery, a St. Paul, Minn., federal online-services contractor that has healthcare.gov as a user; and MSDSOnline, a Chicago company that keeps track of chemical records for big manufacturers, including Johnson & Johnson.

The companies operated at a collective loss last year but show promise of boosting sales rapidly, according to analyst Materne.

Those companies would be a lot more profitable "if we weren't investing roughly 45 percent of revenues in sales and marketing" to fuel expansion, says Buckley. He says the companies rely on remote servers, or "cloud computing," to run their software on the mobile devices most workers now use.

Actua has built up a $300 million cash position to fund expansion and acquisitions, Buckley said.

Buckley has collected $12 million in stock and cash compensation since 2008, according to company reports to the Securities and Exchange Commission. He notes his cash salary has been frozen at $450,000 a year, leaving him dependent on stock-market gains for boosting his income.

"If our stock goes swell, we get rewarded," Buckley said. "If not, then we don't."

Are investors who rode Internet Capital shares down ready to believe in Actua?

The company has made more money for its officers than for outside investors for most of its history, and it will take more than a name change to make up for years of poor performance, said Edward F. McGinley, a retired Goldman Sachs investment banker who lives in Villanova and still owns 100 shares.

Actua directors include some prominent Philadelphians. Among them are lead director David J. Berkman, a Bala Cynwyd investor; Thomas P. Gerrity, ex-Wharton School dean; Thomas "Tad" Decker, vice chairman at the Cozen O'Connor law firm; Michael J. Hagan, LifeShield Home Security founder and former Verticalnet executive; and David J. Adelman, campus housing mogul.

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