InfoSpace (INSP): Where GNET went! Message Board

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Technology Stocks : InfoSpace (INSP): Where GNET went!

INSP 130.34

+11.2%

Nov 25 3:59 PM EST

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To: The O who wrote (22866)	12/19/2000 4:09:47 AM
From: Puck	Read Replies (1) of 28311

I believe that the Goldman Sachs downgrade is in reaction to the recent Merrill Lynch downgrade and not to a fundamental change in the company. There's professional risk to the Goldman analyst in being perceived as having been behind the curve if he doesn't join the Merrill analyst in downgrading in this market environment. As far as I can tell, there is no real rational for his downgrade. The ostensible reason is weakness in the online advertising industry, but InfoSpace has evinced no weakness so far and, more importantly, advertising accounts for less than 10% of InfoSpace's total revenues, which is to say that it is hardly significant: a 10% drop in INSP's advertising revenues would cause less than a 1% drop in INSP's net income. This analyst was just looking for a reason to downgrade to keep up with the Jones's (ML) and it is disingenuous of him to claim advertising as the reason. He belies the sincerety of his rationale further by saying that he expects InfoSpace to exceed his revenue estimates for 4Q. At least we know the cause of the price weakness today. Let's see if the next earnings report supports or refutes his weakness.

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