Ten Alps shares fall by a third, cutting £2m off Bob Geldof’s stake, after Teachers TV contract is ended
More than a third of was wiped off the market value of Ten Alps, Bob Geldof’s production company, today after a multimillion-pound contract to run online education service Teachers TV fell foul of public sector spending cuts.
The shares slumped 5p to 10.5p after the Department for Education cancelled the £10m-a-year contract. The loss was bad news for former rock star and poverty campaigner Geldof, who owns 5% of the company and has seen more than £2m wiped off the value of his stake, which at its peak was worth £2.4m. The Live Aid founder’s share options are also under water.
The contract will end in April. Ten Alps chief executive, Alex Connock, said the decision had come as a surprise: “The letter came completely out of the blue yesterday.” The deal was due to run until 2013 and Connock said the firm would try to run it as a subscription-based service.
Teachers TV is an online resource that carries more than 4,000 educational videos. Ten Alps said it had sold an overseas version of the service to Canada and was now looking at other countries.
The coalition is due to present its comprehensive spending review on Wednesday as it seeks to cut average spending in government departments by a quarter to tackle the UK’s record budget deficit.
Launched in 2005, Teachers TV started life as a digital TV channel, but switched to providing purely online services in September. Connock said the firm, which has seen its market capitalisation shrink to £7.8m, would also seek to adapt the project for foreign education departments, individual users and university courses.
This article originally appeared in MediaGuardian.