There was something otherworldly about the share price gyrations this week of Intertainment Media -the social media wunderkind that got its start in Ottawa a decade ago.
Intertainment shares exploded out of the gate Tuesday, soaring 56 per cent to $3.35 on the TSX Venture Exchange. Within 34 minutes, the shares had slumped 46 per cent, then finally finished the day at $2.25 per share. About 64 million shares traded hands -compared to fewer than 19 million the same day for tech giant Research In Motion.
The shares closed the week at $1.51, trading at much higher volume than usual through Thursday. At its peak on Tuesday, Intertainment had a market value of $420 million -astonishing in light of the fact its sales in fiscal 2010 barely topped $4 million.
The source of all the excitement? Software translation technology marketed by Intertainment's Ortsbo subsidiary and its spokesman, Gene Simmons, the bass guitarist for the rock group Kiss.
David Lucatch, Intertainment's CEO, revealed Monday that the Ortsbo translator was attracting more than 12 million unique visitors each month -an impressive rise since last July, when the product was launched. Lucatch compared his website's traffic with that of Facebook, which took nearly three years to reach the same level -though the comparison isn't really fair. After all, Facebook's earliest fans had to be registered with a university.
No matter -Ortsbo is certainly a hit.
That it exists owes much to the drive of several Canadian entrepreneurs.
Ortsbo's success, if that's what it proves to be, is also a vivid reminder of the mercurial nature of the game. "It's a strange thing," says John Roberts, who led the effort to create Intertainment's predecessor firm, Leitrim Group.
"The company bounces along for more than a decade, then suddenly there's frantic activity."
Leitrim was launched early in 2001 as a capital pool company -essentially a publicly traded shell that was to be used to acquire promising tech startups.
The original five Leitrim managers and directors were all part of Ottawa's booming high-tech scene. Aside from Roberts, these included Dr. Brian Penney, Girvan Patterson, Robert Broomfield and David Edwards.
The timing proved awful. Nortel Networks began its long string of layoffs the week before Leitrim's initial public offering and it would be another four years before Roberts and Patterson found the right candidate in which to invest.
Lucatch in 2005 was running Savers Plus Canada Inc., a firm in Richmond Hill, Ont., specializing in discount savings programs to help businesses build brand loyalty.
"We were impressed with his entrepreneurial energy," says Patterson.
Leitrim early in 2006 executed a reverse takeover, meaning it issued a ton of shares to purchase Savers Plus and a related property so that Lucatch wound up with effective control. Shareholders the following year approved a name change to Intertainment Media.
Lucatch then began the job of changing a marketing services firm into a "new media enterprise."
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