TheStreet.com's failed business in detail (TSCM)

| About: TheStreet, Inc. (TST)

TheStreet.com (ticker: TSCM) announced that it was shutting down Independent Research Group, its institutional research business. Here's the extract from the company's 10-K that describes the business in detail. Interesting reading for producers and consumers of research:

Overview

      In October 2002, the Company formed IRG Research as a wholly owned subsidiary to provide institutional investors with high-quality independent equity research. IRG Research was approved for admission to the NASD as a broker-dealer and began publishing research in April 2003. Its in-house trading desk, which executes equity trades on the NYSE, AMEX and NASDAQ for institutional clients, became operational in December 2003. Today, IRG Research provides proprietary equity research, and brokerage and trading services to more than 200 institutional clients, which include hedge funds and money management firms.

Research

      IRG Research was formed in order to serve institutional investors' growing demand for independent research on small to mid-cap companies that have not been covered or have received limited coverage from traditional Wall Street firms, and this mission remains its primary focus. As of December 31, 2004, IRG employed nine research analysts, covering approximately 75 small to mid-cap companies in the following nine industry sectors: communications equipment, communications services and infrastructure, energy, financial services, graphics and imaging, satellite and cable, specialty retail—hardlines, specialty retail—softlines, and technology. We believe that these sectors represent some of the fastest growing industry and company opportunities in the market, which will help drive demand for the firm's equity research. In an effort to serve its institutional clients, IRG Research analysts strive to find undervalued companies within these sectors that have been overlooked by the markets, and to deliver timely recommendations to clients to enable them to take advantage of opportunities. As a small, boutique firm, IRG Research can also offer its institutional clients the opportunity to communicate directly with its analysts to discuss their research reports, enabling it to build lasting relationships.

      IRG Research has also begun to offer consultative research in addition to its proprietary fundamental research, in an effort to expand its customer base to buy-side firms that focus on particular industries, such as health care. Accordingly, IRG Research entered into an agreement with MDRx Financial, Inc., a pharmaceutical and healthcare research provider (“MDRx