USA Interactive

(USAI) - Get Report

slid 7% Wednesday after


(V) - Get Report

sold off a bunch of USA stock warrants in its continuing quest to raise cash.

The companies said Vivendi had agreed to sell 28 million USA warrants for $240 million in cash to Deutsche Bank, which in turn plans to sell notes exchangeable for the warrants. Three-quarters of the warrants carry an exercise price of $27.50, and the other quarter has a $32.50 exercise price, Vivendi said.

USA dropped $1.48 to $22.77 as investors worried about the prospect of more shares coming on the market. Vivendi dropped 20 cents to $15.25.

USA, the e-commerce outfit run by media hard-hitter Barry Diller, and French conglomerate Vivendi have long been entwined. In late 2001, the companies agreed to a complex swap of entertainment assets that matched Diller's USA Networks with Vivendi's Universal Studios, creating a new company called Vivendi Universal Entertainment. Diller runs and owns a small stake in the company.

Speculation on Wall Street has come to center on the question of precisely how Vivendi will extract value from the entertainment division, with Diller and numerous others being rumored as potential buyers. Vivendi has been intent on raising cash to pay down the massive debt load that Jean-Marie Messier racked up in turning Vivendi from a humble water company to a fast-expanding multimedia entertainment play. The company has sold billions of dollars' worth of assets and plans to sell more, it says.