NextCard hurting, seeks suitor

Summary:The online credit provider says it is looking to sell the company on reports that its quarterly losses widened.

NextCard said Wednesday that it is seeking a buyer, news that caused the online credit card issuer's stock to slide nearly 85 percent.

The announcement by the San Francisco-based company came as it reported a wider third-quarter loss, pulled back from profitability expectations, and withdrew its outlook for future quarters.

NextCard, which launched in 1997 and is backed by e-tailer Amazon.com, blamed some of the wider losses on new regulations that required the company to classify "fraud losses" as "credit losses." In 1999, Amazon invested $22 million in the company.

Phone calls to NextCard's customer service department on Wednesday morning were met with the recorded message, "At this time we are unable to take your call." NextCard executives were not immediately available for comment.

After closing the regular session Tuesday at $5.35, the stock closed Wednesday's session down $4.48, or 84 percent, to 87 cents.

The company said Wednesday that its net loss in the third quarter was $53.1 million, or $1 per diluted share, compared with a loss of $14.4 million, or 27 cents a share, in the year-ago period.

NextCard said in a statement that it has hired Goldman Sachs to search for potential buyers. --Greg Sandoval, Special to ZDNet News

Topics: Amazon

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