Value Find: EDGAR Online, Inc.

After years of mismanagement, the combination of an experienced new CEO and the adoption of a new financial reporting technology have things looking up for this financial data and information provider.

Founded 11 years ago, back before the first dot-com boom, EDGAR Online, Inc. (Nasdaq: EDGR) was the first company to make U.S. Securities and Exchange Commission (SEC) filings available in real-time on the Web. Norwalk, Conn.-based EDGAR leveraged this early-mover advantage into a subscription-driven business largely focused on the consumer market. Faced with a host of competitors and increasing pricing pressure, though, EDGAR’s revenue stayed flat at around $16 million a year from 2002 to 2006, and sustained profitability proved elusive.

Over the years, EDGAR’s founding management gained a reputation for broken promises and the stock languished. At the Tuesday’s closing price of $2.73 a share, EDGAR’s stock is down over 40% from where it traded at two years ago. Shares have traded between $2.04 and $3.65 over the last 52 weeks. Frustrated EDGAR shareholder Basil Regan, of Regan Partners, took matters into his own hands in February of last year when he announced plans to shake up EDGAR’s board of directors and management. EDGAR responded to the shareholder pressure by naming two new independent directors and plans to hire a new company president.

These moves averted a proxy contest by Regan Partners and, in April 2007, EDGAR named Philip Moyer, a former Microsoft Corporation (Nasdaq: MSFT) executive, as its new president.  Only a few months later, in August 2007, with the resignation of EDGAR CEO and co-founder Susan Strausberg, Moyer took over the top spot as well. Moyer finished his 15-year career at Microsoft as the general manager for its professional services industry. Moyer’s arrival at once-sleepy EDGAR is a good endorsement and seems particularly well timed to boot.

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