Datalex, the Dublin-based developer of software for the travel industry, has no intention of closing down, its CEO, Mr Neil Beck, said yesterday. The company, in line with other Internet-focused businesses has seen its share price fall dramatically this year.
Mr Beck said its share price would recover and the company is diversifying to provide services for other sectors.
He was speaking from Atlanta, Georgia, after Datalex had announced that it had taken a 30 per cent stake in the newly-formed Framework Technology Corporation in return for an investment of $500,000 and $1.5 million in other assets. These assets include the intellectual property, the technology which underlines Framework, and the offices in Portland, Oregon, where Framework Technology is located. Datalex also has agreed to provide a working capital loan of up to $800,000 for the initial 12 months of Framework's operation. Around 27 of the staff of Sight and Sound, a company acquired by Datalex last year, will be employed in Framework.
Datalex's share price has fallen to around 85 cents in New York from $11.50 on flotation this time last year. The company's market capitalisation is $20 million, while it has $65 million in the bank.
Asked if Datalex would not just close and give the shareholders the money, Mr Beck replied: "That is not what business is all about. It puts us in a very strong position. Having money in the bank helps us weather any storms. The current environment, September 11th, the downturn in the economy are temporary aberrations. Having the money in the bank will help protect us from those aberrations and will let us emerge at the other end.
"The economy will recover, we are confident of that. The travel business will recover, we are confident of that. We have to position ourselves to be strong when those events happen. To bail out now would be totally the wrong thing to do and has never been considered."
Following the resignation last week of the chairman. Mr John F Tierney, there were concerns about the robustness of the board. Businessman Mr Paschal Taggart joined the board this week and Mr Beck said another Irish non-executive director would be appointed shortly.
Datalex had not lost any customers since the attacks of September 11th, he said. He would not be drawn on the "new range of industries" the company was targeting other than to say "we're not restricting ourselves, but e-commerce in general".
