Online real estate company Homestore Inc. said on Thursday it had settled a contract dispute with America Online, the Internet division of AOL Time Warner Inc., and had signed a new 18-month marketing pact.
News of the settlement sent Homestore shares higher in after-hours trade on Instinet, where they flirted with $1.40 before settling at $1.36. The stock had ended the regular Nasdaq session 3 cents higher at 94 cents.
AOL shares were unchanged from their close of $14.33 on the New York Stock Exchange.
"I think it's pretty positive," U.S. Bancorp Piper Jaffray analyst Safa Rashtchy said. He noted that the contract dispute was one of the major liabilities faced by Homestore's new managers, who are working to right the company after it was rocked by an accounting scandal related to the overstatement of advertising revenues in 2001.
"It's not the final stage of recovery for them, but it's a big step," Rashtchy said.
Homestore said it will pay AOL $7.5 million cash for terminating a prior marketing pact as part of a settlement of a contract dispute that began in October 2001.
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News source: Yahoo