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Multex, Merrill sign pact
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December 22, 1999: 4:02 p.m. ET
Data deliverer will work on ways to make Merrill’s analysts more interactive
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NEW YORK (CNNfn) - Multex.com and Merrill Lynch have signed a deal for Multex to develop Web sites that will deliver research and information to Merrill Lynch’s institutional clients.
Multex also will create ways to deliver Merrill research and information, such as upgrades or downgrades, to its customers via a variety of wireless devices, including Internet-enabled cell phones, pagers and personal digital assistants such as Palm Pilots.
The idea is to make Merrill Lynch’s analysts "interactive” by making their opinions and research available in real time, according to a conference call with executives of the two companies.
Multex President James Tousignant told CNNfn that the services would be rolled out internationally. (798K WAV or 798K AIFF)
Merrill Lynch (MER) will take a minority stake in Multex.com (MLTX) as part of the agreement. The companies did not reveal the exact amount of stock Merrill will buy, but the executives on the conference call characterized the stake as a minority, passive investment of less than 5 percent in unregistered, restricted stock.
Though the companies did not disclose details, a source familiar with the deal put its total value at $100 million. Multex executives would neither confirm nor deny the figure.
The agreement is for five years and also gives Merrill Lynch an option to renew for another five years. In the conference call, Multex executives said they were confident Merrill would renew.
As part of the agreement, which the companies signed Tuesday, Merrill also renewed its "platinum sponsorship” of the Multex Investor Web site for two years. The other sponsors of the site -- which serves retail investors -- include Salomon Smith Barney, Morgan Stanley Dean Witter and Prudential Securities. The site recently passed the 1 million customer mark, said Jim Tousignant, Multex president.
Multex already provides technology and support for Merrill Lynch’s self-directed online retail brokerage, Merrill Lynch Direct, which was unveiled in June. It does the same for Merrill Lynch Online, a longer-lived service that allows mainly higher-net-worth Merrill customers to access research and account information rather than trade.
Merrill’s agreement with Multex is nonexclusive and designed not to compromise Multex’s neutrality, Tousignant said in the conference call. Multex relays information from 600 brokerages, investment banks and third-party research companies to their customers and for internal use, he said.
Multex and Merrill will co-develop Web sites around the world to provide local content. The companies also will use wireless technology to deliver personalized news, market data and interactive conference calls to institutional customers via cell phones, pagers and PDAs.
Multex will roll out the first version of the new services in the first quarter of 2000, said Isaak Karaev, Multex chairman and CEO. In the first quarter, the company will release more specific plans for introducing the rest of the services, he said.
Much of the technology is available, but the timeline depends on how Merrill allocates its resources internally, he said. Although plans are preliminary, Tousignant said he expects to roll out Web sites in English-speaking countries first, followed by sites in other languages.
Wireless delivery of Merrill research would come next, Tousignant said. He expects some wireless delivery to begin in 2000. The wireless delivery will complement the Web sites rather than replace them, he said. Investors who are out of the office will be able to place filters on the information they want to receive, so that they can get alerts when new reports come out or when a conference call is announced, for instance, he said.
The deal with Merrill, which has 7 million retail customers, "significantly expands our core business of connecting investment banks and brokerages with their clients via the Internet,” Karaev said. It likely will lead to similar deals with other brokerages, he added. Multex, which also provides company information and research for CNNfn.com, serves 2 million customers now, he said.
News of the agreement, which analysts greeted as good news for Multex, sent the company’s stock skyward. Late Wednesday afternoon, it was trading at 38-3/16, up 8-3/8, or 27.9 percent from its opening price. Merrill stock down 3/4 to 77-1/4.
Multex relays research and information to both retail clients, through Multex Investor, and institutional clients, through Multexnet.com. The company should benefit from the growth of the Internet worldwide and the delivery of wireless research, Tousignant said.
"There’s going to be a major explosion in the online financial services market, and we think we’re going to play a very big part in it,” he said. 
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