Shares of Dwango Wireless Inc. plummeted Tuesday and Rick Hennessey stepped down as chief executive officer after the content provider posted a second-quarter loss of $5.56 million, or 64 cents per share.
Dwango, which delivers wireless offerings from Beliefnet Inc. and will launch Playboy-branded content later this year, said a “charge relating to a contract with a major carrier for premium deck placement” was largely to blame for increased expenses during the quarter.
Dwango said declining sales of its Rolling Stone-branded content contributed to a 17-percent drop in total revenues in the second quarter compared with the previous quarter. The company reported revenues of $885,000 during the period.
During the first quarter of this year, Dwango lost $4.85 million, or 58 cents a share, on sales of $1.06 million. The company launched its first significant offerings last summer and had minimal revenues during the second quarter of 2004.
“We are not satisfied with the results for the 2005 second quarter and are committed to improving Dwango’s financial performance,” said Victor A. Cohn, chairman of Dwango’s board of directors.
Hennessey will be replaced by interim CEO Alexander Conrad, who will continue to serve as president, chief operating officer, secretary and board member.
Investors responded to the disappointing figures by sending shares of Dwango into a tailspin Tuesday morning. The stock plunged nearly 50 percent, bottoming out at a 52-week low of 65 cents per share before rebounding slightly. The over-the-counter Bulletin Board stock was trading at 67 cents per share by mid-day Tuesday.
