(Reuters) - Angie’s List Inc, which operates a website that allows users to review local businesses, reported a bigger-than- expected quarterly loss as it added fewer paid members.
The company’s shares fell as much as 20 percent, adding to their steady decline through the year. Up to Tuesday’s close, they had nearly halved in value this year.
The company has been losing market share and subscribers because it charges customers membership fees to access reviews and ratings on its site that Yelp Inc, TripAdvisor Inc and others provide for free.
As a result it has had to slash membership fees over the past few years and has failed to turn in a profit since it went public in 2011.
Angie’s List said on Wednesday gross paid membership additions for the third quarter ended Sept. 30 fell 6 percent from a year earlier.
It also forecast lower-than-expected fourth-quarter revenue of $80-$82 million, blaming an “unfavorable trend” in its e-commerce business.
The company’s e-commerce unit offers the “Big Deal” product - daily discount deals emailed to members.
Analysts were expecting fourth-quarter revenue of $84.2 million, according to Thomson Reuters I/B/E/S.
The weak results come on the back of reports that the company could be exploring a sale.
The Financial Times reported last month that Angie's List was exploring strategic options, including a possible sale. (on.ft.com/1sOgt8A)
“Angie’s List stock today is giving back much of the increase that it enjoyed from the recent ‘shopping itself’ rumor, which management neither confirmed nor denied on the (conference) call,” Barrington Research Associates analyst Jeff Houston said.
The company reported a net loss of $5.2 million, or 9 cents per share, for the quarter ended Sept. 30, compared with the average analyst estimate of a loss of 6 cents per share.
Revenue rose 24 percent to $81.3 million. Analysts on average had expected $81.6 million.
Shares of the company were down 19 percent at $6.67 in early afternoon trade on the Nasdaq. Up to Tuesday’s close, the stock had lost 70 percent of its value since touching a life-high in July 2013.
Additional reporting by Supantha Mukherjee; Editing by Saumyadeb Chakrabarty