The Ronald Frankel era is officially over at Synacor Inc.
Frankel, who was replaced as chief executive officer at the Buffalo Internet content provider earlier this month, cut his final official tie to the company on Tuesday when he resigned from its board of directors. He had been CEO since 2001.
Frankel’s resignation comes as the company’s business is being battered by losses and shrinking revenues, and a pair of major investors are waging a campaign to force the resignation of Synacor Chairman Jordan Levy and another long-time director, Andrew Kau.
The dissident investors – investment firms JEC Capital Partners and Ratio Capital Management – own a combined stake of 9.8 percent in Synacor and offered last week to pay the costs associated with holding a special shareholders meeting that would consider the removal of Levy and Kau from the company’s board of directors.
The investors also had opposed Synacor’s efforts to hire a successor to Frankel – a search that ended earlier this month with the hiring of former Comcast executive Himesh Bhise – and instead have urged the company’s board to put the firm up for sale. Bhise said earlier this month that he plans to take 45 days to develop a strategic plan for the company, which is hoping to bring in new revenues from products that it is developing to allow consumers to sign into and access its customers’ content on a wide range of mobile devices.
Bhise’s hiring came just before Synacor reported a $1.9 million loss during the second quarter. The earnings report indicated that Synacor’s business weakened on almost all fronts, with lower revenues, fewer visitors to the websites it runs for its customers, fewer search queries through those websites and less clicks on the advertisements on those pages.
The company, which burned through cash at an accelerated pace during the second quarter, also suspended a stock repurchase program it launched during the first quarter in a move to save its still-ample supply of cash.
Synacor also disclosed that it will lose a key revenue source when one of its biggest customers, Charter Communications, takes the operation of its start page in-house by the end of March.
While Synacor executives said they have signed an amended agreement with Charter that gives the company the chance to provide the cable television company with additional products and services, the loss of the start-page business leaves a gaping hole in Synacor’s revenue stream that analysts estimate at more than $10 million, or more than 10 percent of the company’s expected sales of $100 million to $103 million this year.