Intermix On the Radar

Second chances are rare for dot-com also-rans, but the rebound in Intermix (MIX Quote) could give tech investors something to talk about.

Intermix used to be eUniverse, a company that found its Nasdaq listing through a reverse merger with a nearly defunct motorcycle retailer, dabbled in an eclectic mix of Web sites, restated its finances and was banished to the pink sheets. But now, thanks to a new management that saw potential in an emerging technology called social networking, Intermix has found a home on the American Stock Exchange, where its stock has been rallying.

The stock has risen from $2.25 in October 2003, shortly after the venture firm Vantage Point took Intermix under its wing, to a high of $7.13 earlier this month. Funds that have been invested in Intermix for years -- even through the dark times, when the stock was trading for less than the value of its assets -- believe the stock has room to go higher.

"It's still very early for this company," says Michael Balkin, who co-manages the (WBSNX Quote)William Blair Small-Cap Growth fund. "They've had a lot of challenges and now they have a lot of opportunities. I think there will be a period of being discovered by Wall Street, where it will get on a lot more radar screens."

Rules of Attraction

Right now, you'd need a pretty sensitive radar to find Intermix. Its tiny market cap of $210 million and its sleepy daily average turnover of 208,000 shares have shut out investments from most institutional investors.

Balkin and others believe that will change, in part, because of Richard Rosenblatt, a 35-year-old Internet veteran whose tousled hair and chipper persona make him look like he stepped out of a Dawson's Creek spinoff. Rosenblatt founded two companies, iMall and GreatDomains, selling them to Excite@Home for $565 million and VeriSign for $100 million, respectively. Rosenblatt set up a venture firm, Prime Ventures, and briefly signed on as CEO of drkoop.com, after the medical content site had reached critical condition.

In the Mix The Intermix rebound

As the tech bubble burst, Rosenblatt was unable to turn drkoop's content into a viable business. "You learn a lot more from a failure like drkoop than from a success," says Rosenblatt. "I learned you have to look at the business carefully and only try to do a few things. Drkoop was trying to do way too many things."

eUniverse presented Rosenblatt problems that drkoop.com, for all its baggage, didn't face. Under Rosenblatt's predecessor, founder Brad Greenspan, the company had more than its share of controversy, notably a May 2003 restatement of $39 million in revenue over three quarters. Nasdaq delisted the stock in September 2003 and Greenspan and the CFO left the following month.