Virtuallender.com Inc., an on-line mortgage lender and broker, said it would spin off Homesmart.com as a separate public company, perhaps within weeks.
The companies merged Feb. 26, hoping for synergies between Homesmart's on-line realty services and Virtuallender's on-line mortgage brokering and subprime lending.
But Carol Pizzo, the president and chief executive officer of Virtuallender.com, now says their goals are not complementary.
"The best would be for us to pursue our business model and them to pursue theirs," she said.
Virtuallender will retain one million shares of Homesmart's stock, for a 15% stake. In doing so "we will still have access to a great number of leads from them, specifically subprime leads and equity line leads," Ms. Pizzo said.
San Mateo, Calif.-based Virtuallender, which was established in early 1998, funded $2 million in June and expects to do $6 million in July.
"We will easily double it each month going forward," Ms. Pizzo said.
Virtuallender recently obtained a $20 million warehouse line of credit. It now is seeking $25 million in venture capital to support operations through the first quarter of next year.
The company went public in February by buying Golden Chain Marketing Inc., a shell company that was traded over the counter but had no operations or assets. Virtuallender has filed for a Nasdaq listing. Its stock, of which 2.5 million shares are outstanding, closed Friday at $6.125, up $1.5625 for the week.
Virtuallender raised its starting capital entirely from private investments. Most of its 30 employees, including Ms. Pizzo, are senior mortgage banking executives.
Virtuallender plans a national television and radio marketing campaign for August.
