Starmedia

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Starmedia
Type	Latin Internet
Founded	1996
Headquarters	Issy-les-Moulineaux, France
Key people	Fernando Espuelas, Founder Jack Chen, co-Founder
Industry	Internet
Website	www.StarMedia.com

Starmedia is a well known Latin American Internet brand, founded in March 1996 by Fernando Espuelas and Jack Chen as a part of the now defunct Starmedia Network. Starmedia is now owned and operated online by France Telecom subsidiary Wanadoo SA, where it continues to serve millions of Latino internet users.

1 Early Beginnings
2 Public Offering
3 Market Decline and Sale
4 SEC Fraud Lawsuit
5 External links

[edit] Early Beginnings

Fernando Espuelas and his childhood friend, Jack Chen, founded Starmedia in 1996 with $100,000 in personal savings.

A year later, the pair were successful in raising $3.5 million from Susan Segal, general partner of Chase Venture Capital. Soon after, Starmedia raised additional venture capital with Flatiron Partners and Warburg, Pincus Equity Partners. Most of Starmedia's venture backing came from institutional investors in New York.

[edit] Public Offering

Starmedia went public on Nasdaq under stock symbol STRM, on May 25, 1999 in an IPO of 7 million shares priced at $15 per share.

Starmedia became one of the best known Latin Internet Stocks on Nasdaq during the late 1990s dot-com boom, in addition to Quepasa, Terra, and AOL Latin America.

[edit] Market Decline and Sale

During the .com bust of the late 1990s, Starmedia lost almost all of its market value, and was the subject of extensive shareholder litigation.

The Starmedia website and related intellectual property was bought by the Spanish ISP eresMas Interactive for US$8 million in cash on July 3 2002, the same month eresMas was acquired by France Telecom subsidiary Wanadoo SA.

In early 2003, what was left of Starmedia's shell corporation was renamed CycleLogic, and shareholders approved a one-for-1,000 reverse stock split. Shortly thereafter, CycleLogic deregistered its shares with the Securities and Exchange Commission.

On March of 2004 CycleLogic was acquired by an international group of investors, becoming a part of the IMS group of companies, Intelligent Mobile Solutions Inc.

[edit] SEC Fraud Lawsuit

On March 29, 2006, the United States Securities and Exchange Commission sued past Starmedia CEO and founder Fernando Espuelas for securities fraud. The lawsuit seeks to ban and bar Espuelas from operating a public company. [1]