2TheMart.com Delays Launch of Auction Site

2TheMart.com Inc. is facing more delays with its ambitious plans to set up an Internet auction site to compete with eBay Inc. and others, an executive said Thursday.

The Irvine company’s auction site, scheduled to debut by the end of this month, won’t be operational until the fourth quarter, said Mark Rosenberg, the company’s vice president for marketing and sales.

Previously, 2TheMart said the Web site, which is being developed by International Business Machines Corp.’s Global Services unit, would begin operating by June 30.

2TheMart delayed the opening while it spends more money to make sure the site can handle “high volumes of transactions,” said Rosenberg, who was hired a month ago from IBM.

The company is paying IBM $9.5 million to develop the site, up from $4 million. He declined to say how the additional costs will be financed.

Separately, Rosenberg said the company is delaying its first filing with the Securities and Exchange Commission until next week. Last week, 2TheMart said it expected to make the filing Wednesday.

“It’s incredibly important to do this right,” said Rosenberg.

Companies are only required to file with the SEC when their assets exceed $10 million and they have more than 500 shareholders of record. 2TheMart now plans to file a report, including financial statements audited by Deloitte & Touche LLP. The report is being prepared by the law firm of Gibson, Dunn & Crutcher.

The company’s shares, which trade over the counter, have taken huge swings.

Earlier this year, the stock moved from $2 to $50 a share in one week, although 2TheMart has no customers or revenue, and has never released a balance sheet.

On Thursday, the stock fell 12.2%, or $2 a share, to $14.50, giving 2TheMart a market capitalization of $290 million.