Shares in one of the largest gay media companies in the world, PlanetOut, fell yesterday to their lowest since October’s reverse stock split.

A spokesman for the NASDAQ-listed company confirmed they are looking for potential buyers. Yesterday its share price fell 23.4% to $4.75 (£2.42).

Companies split their stock when they believe the price is too low to attract investors.

In order to retain a listing on the NASDAQ, PlanetOut reduced their stock by 10 to 1, meaning that 1,000 shares became 100.

This increased the share price and reduced the number of shares – without that manouvere they would be trading at below $1 a share.

It has been a rocky year for the company. It is now trading at 13% of its value in January 2007.

In May high operating costs and declining sales resulted in a considerable first-quarter loss and a resulting slide in share price.

PlanetOut owns The Advocate, Gay.com, PlanetOut.com, Advocate.com, Out.com, OutTraveler.com and HIVPlusMag.com, as well as localised versions of the Gay.com site in English, French, German, Italian, Portuguese and Spanish.

In July a company that invests the wealth of Microsoft founder Bill Gates purchased a major stake in PlanetOut.

Cascade Investments LLC joined with a number of other private equity vehicles including Special Situations Funds, SF Capital Partners, PAR Investment Partners LP and Allen Company LLC to fund a rescue buyout of PlanetOut stock.

That same month the company closed its London and Buenos Aires offices as part of a streamlining of business operations designed to reduce costs. 273 staff were made redundant.

Chief executive Karen Magee told Dow Jones that it would take at least 12 to 24 months to turn PlanetOut around and that the company may sell its adult businesses.

Her strategy was to create a greater level of integration between the company’s online and print businesses and put advertising revenue at the core of its business model.

The company sold its travel business RSVP Vacations to Atlantis Events in November.

SpecPub is also expected to be sold – it publishes hard core gay titles such as Freshmen magazine.

In the USA, PlanetOut faces competition from MTV owner Viacom who run the Logo gay television network, itself owning 365Gay.com, AfterEllen.com and AfterElton.com.

PlanetOut floated in October 2004 at a share price of $9 (£4.48), it quickly rose to $14.26 (£7.10) in November that year.

Allen Company is assisting PlanetOut in finding a buyer.