More of the Same
Just in case it isn't blatantly obvious...
Say it with me now:
BULL MARKET.
Now that that is over with, let's take a look at one of yesterday's "major" announcements, TheStreet.com finally filing for an IPO.
Looking for my first thought?
"How exciting" comes to mind.
But that is a bit too short, and doesn't do justice to the "event."
The rest of this column, however, should.
Given that our buddy Jimmy's effort will soon be traded just as every other internet stock is, along with the fact that the effort will be receiving much more scrutiny from the public eye than I am sure the venture is prepared for, I thought it would be helpful to make a few comments based upon the facts laid out in the SEC filing.
Here goes.
What seems to stick out enormously in this filing are the following facts:
1. Lack of revelation of the impressions generated on the site.
As a quick review, impressions (or page views) are simply the sum total of, strangely enough, the amount of pages viewed by users over a set period of time. For instance, a portal such as YHOO garners hundreds of millions of page views during the course of a quarter, given its grouping of a vast array of information and entertainment that appeals to a broad spectrum of users. As such, page views are one of a series of primary yardsticks used by advertisers in determining the viability of the audience that they choose to reach, as well as what they are willing to pay to be affiliated with their chosen site(s).
Which leads to our next question:
Why weren't the page views revealed?
Only Jimmy and his team know for sure, but you can bet that given the noticeable "oversight" of this very pertinent information, it was done for a reason.
I'll leave it up to you as to what that is.
2. Suprisingly low number of users of the site.
Case in point: If one looks at the number of "unique" visitors in January, the number falls into the low 200,000 range.
While that might initially sound high, let's put it in perspective. Given that Jimmy has deals with, for instance, YHOO, that have been in place for a while, to be quite conservative, at least 1% of the traffic of the Yahoo Finance site should become regulars of TheStreet.com.
However, if you recall that approximately 67,000 new users come onto the Internet for the first time EVERY DAY and TheStreet.com has been up and running for approximately two years, the discrepancy between the two should be illustrated quite clearly.
Not to mention that in addition to entertainment, personal finance is one of the hottest topics on the web.
As for why the above is the case, could it possibly be due to:
1. Jimmy's remarkable ability to overpromise and overdeliver?
Feel free to reference Jimmy's chest pounding pronouncement of last year, whereby he stated in no uncertain terms that the site would have garnered 100,000 paid subscribers by now.
As opposed to the roughly 30,000 that it currently has.
2. The not one, but multiple times the SEC has made inquires as to the legality of Jimmy's involvement in the financial markets?
3. Jimmy's remarkable ability to flip back and forth on his belief that "tech is good" more times than a raft in the middle of a river, given the current conditions of the climate?
As a side note, given I know you are asking, feel free to reference an earlier column that not only called the bottom in the recent rout of tech, but also gives a good understanding of why tech is here to stay.
4. The reliance upon the subscription model?
As to why this doesn't make sense, feel free to participate in the following chant:
What is the 'net known for (in addition to a great source for information and entertainment?)
That all of it is free.
That is, with the exception of TheStreet.com
End of story.
So in wrapping all of this up, here are a couple of final thoughts.
In Jimmy's rush to judgement on monetizing his effort, there has more than likely been a couple of very important factors that have been pushed aside.
They are as follows:
Life in the public eye as a public company is very different than life in the public eye as a group of individuals spouting off about their views on the market. That is, when exposed in this manner, the public must have confidence in the accuracy and legitimacy of the said effort.
And as such, if the overpromising and underdelivering becomes a habit, as has been the case here, both in terms of Jimmy's "vision" of the markets, as well as the simple stats of the business plan, it tends to catch up with that effort in a very big way.
So expect the deal (call me a psychic if you must) to be a hit initially, but that the follow through is predicated on TheStreet.com's ability to consistently perform for it's shareholders.
Something that, just to point out, will be very interesting to watch.
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