RE <<CMGI is one of the companies I called as being a dud a long time ago>>
I would agree 100% weeks or months ago, BUT things have changed, or should I say prices have changed significantly. First, let me say that back in the days (not so long ago) when insane valuations
were awarded to CMGI and its like, I used to use CMGI as
an example of what a over valued market we were in. I used
to consider it a method of over paying twice for the same
internet assets.
The stock has now reached a point that I can not say that
anymore, so from someone who once thought he would never
touch CMGI, let me list some reasons to buy it (shocking,
isn't it!).
1. This is not a small dot com with $30 million to $100
million in cash. $1.68 BILLION (yes, Billion) in cash
and marketable securities. That's a lot of firepower!
2. The stock price has now moved BELOW the cash per share!
3. The stock price is very close to ONE X sales.
4. Contrary to the headline numbers of how much they are
losing per share, they ARE NOT cash flow negative!
see: biz.yahoo.com
for the quarter ending OCt 31st 2000,
NOTE that the net loss was $636 million BUT
Amortization of intangible assets was $652 million.
5. Fairly good size short interest that may want to
cover considering we are now in the new year.
6. Severely oversold stock, due for a bounce and
perhaps a little January effect (no doubt had much tax
selling)
To sum up, I actually bought (GULP) CMGI yesterday.
Never thought I'd say that!
I'm certainly open to hearing any reasons for a continued
bearish story for this stock, so have at me!
Regards, Eric. |
