Updated Monday, December 24, 2012 at 04:16 PM
Bellevue-based Motricity, which has been struggling to reinvent itself and stave off a delisting from the Nasdaq, saw its shares tumble Monday after disclosing it lost its single biggest customer.
The stock lost a third of its value and ended the abbreviated holiday trading session at 44 cents.
Motricitiy said in a regulatory filing Friday that AT&T’s wireless subsidiary had canceled the agreement under which Motricity had hosted AT&T’s MediaNet and ATT.net portals. That deal, which dates back to 2005, accounted for 42 percent of Motricity’s $68 million in revenue in the first nine months of this year.
A separate agreement under which Motricity hosts AT&T’s AppCenter storefront remains in effect; it accounted for about 18 percent of the company’s year-to-date revenue.
Losing such a big customer is bound to hard on Motricity, whose business already has been under pressure. The company lost $10.08 million in the first nine months of the year, while revenues were down 9.1 percent versus the same period in 2011, though some of that decline may be due to the company’s decision earlier this year to exit markets in Asia and Europe.
Besides AT&T, Motricity’s other major customer is Verizon, from whom it derived 19 percent of its year-to-date revenue.
The company noted in its third-quarter report that should it lose any of its big clients, “we could be forced to shift our marketing focus to smaller wireless carriers or accelerate our focus on mobile media and enterprise business, and this could reduce our revenues.”
Previously based in North Carolina, Motricity moved its corporate headquarters to Bellevue after it acquired the mobile operations of InfoSpace (now Blucora) in 2007. It went public in June 2010, but has had difficulty finding sure footing amid waves of acquisitions, divestitures, restructurings and executive turnover.
Last week, Nasdaq told Motricity that its stock would be delisted unless it came up with a credible plan to boost its price above $1 and keep it there. The shares have been trading below $1 since early May.
The company’s latest plan involves a reverse stock split that would essentially aggregate 10 existing shares into one new, presumably higher-priced share, and a reorganization that would subsume Motricity into a new company, Mobile Systems Corp.
Shareholders will vote on both moves at the annual meeting scheduled for Jan. 29, though given the company’s capital structure approval is likely: Mega-investor Carl Icahn owns 30.7 of the company’s common stock and 95.5 percent of its Series J preferred shares, each of which carries 40 votes.
Drew DeSilver: 206-464-3145 or firstname.lastname@example.org