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NEW YORK ( -- Motient Corp., a Reston, Va.-based wireless and Internet communications company that had planned to merge with i-shop Rare Medium Group, said in a statement today that the two companies had "mutually agreed to terminate the pending merger."

As part of agreement, a $50 million loan that Rare Medium had made to Motient has been extended until Oct. 8, and Motient has canceled plans to perform a 1-for-10 reverse stock split.

In a separate announcement today, Rare Medium said it has laid off 25% of its staff, but declined to name how many people were affected.

Rare Medium has been treading water during the Internet downturn that has hurt the interactive agency business.

In the second quarter, the New York-based company reported a net loss of $25.9 million, or 46 cents per share, compared with $27.7 million, or 66 cents per share, for the same period a year earlier.

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