EDGAR Ties the Knot with the SEC

How many companies could say the Securities & Exchange Commission was their friend? EDGAR Online (EDGR ) certainly can. EDGAR (electronic data gathering, analysis, and retrieval) is tops in the business of getting information filed with the SEC off the Net quickly. Here's the scoop: In about a week, the SEC will start referring anyone seeking SEC documents to EDGAR. The SEC has signed a contract for EDGAR to provide such info free of charge. But for more detailed data, there's a fee. "This new situation will double our traffic and ultimately our revenues," says EDGAR Chairman Marc Strausberg. EDGAR has 800,000 registered users. Of those, 20,000 individuals and professionals already pay $20 a month for specialized services, and 660 corporations fork over an average $2,400 a month. EDGAR's biggest client: Nasdaq, which pays $5 million a year. Reuters, which owns 4% of EDGAR, pays $1 million a year.

Michael Smith of Fahnestock, who rates EDGAR a buy, says it has done a good job of moving toward profitability. EDGAR posted a 100% jump in third-quarter revenues. He sees a slight loss or breakeven this year and earnings of 13 cents a share in 2002. Smith sees EDGAR, now at 2.69 a share, doubling in 12 months. Down the road, he says, EDGAR might be acquired by a large media or information outfit.

By Gene G. Marcial

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