Up until it happened, I was of the opinion the Cisco news wouldn't happen. It was an announcement Messagemedia didn't want to make.
Consider, the lunatic fringe that created the first blackhole in cyberspace and all its kind, goes to bed at nights worshiping the blinking lights on their Cisco routers, for them to learn that Cisco has cast its lot with Messagemedia, it must have been an earth shaking revelation Cisco wanted to avoid.
My take on the situation is that we are coming to the end of the year and all those fund managers who invested in October, Van Wagoner included, wanted to jack their annual returns up so they put pressure on Messagemedia to support its stock. Messagemedia, in its infinite wisdom, dropped the Cisco Message to get price off $13 and above $14.
The fact MESG didn't go to $20/shr on the news suggests there may have been a large seller in the market, but I believe Messagemedia has a much larger problem on their hands and that's "perception".
Stock, is just a piece of paper that isn't worth toilet paper, but investor perception gives it value. In other words, large buyers in the market, even if they are wrong, are right when they buy. And the same for large sellers.
I watched CNBC and Joe treated the Cisco announcement as a footnote to the more important news he wanted to talk about, which was LV Linux et al. In short, Joe's perception of Messagemedia was low, considering Linux was the news of the day and other bulk emailers were pushing $100 to $200 per share.
I said it before, Jones made a mistake by not answering the average number of email messages Messagemedia sends daily. Although this is an earnings driven market, don't try to define the company with just 50% growth every quarter. Quarters are too far apart for that in today's fast moving market. Besides, investors like simple numbers so they can make comparisons in their effort to preempt the market.
Look at my posts on this thread. I've done a lot of explaining why I think Messagemedia will win the email wars. But it is a complicated perception and it is hard to understand not to mention it requires faith that I'm right.
Right now, Messagemedia is a hard sell, mostly because it doesn't want to help itself. There are some things they can, let's see if they do any of them:
1) Playing up to perception, they should be talking about email and how its helping ecommerce this Christmas season. They should quantify this in numbers, percentages, dollars, etc. Get their story out there, tell the community who the gorilla really is.
2) They need to get Goldman Sachs working for them. GS has the resources (money) and talent to push MESG to its upper limit. If GS were a committed MM on messagemedia, they could push MESG to $200/shr like they have done with YHOO, AMZN, KANA et al. and they do it with talented traders who know how to pull off a short squeeze. When you think about it, we're talking about a 1000% increase in value and that ought to be worth prostrating yourself before the big boys on the block.
In short, Messagemedia is the best email buy out there (more on this later), they just need to get their act together and work on perception. |
