The decline in Infospace's stock price this year parallels the decline in the technology stock indexes. Also I believe that Infospace's management still suffers from the failure of Naveen Jain to grow the company as much as he predicted it would during the height of the tech. stock boom in 1999 and early 2000. During the past year he has toned down his act and attempted to be realistic and very conservative in setting investor expectations for how the company might perform, which is the right direction to go. In time, if he continues in this vein, and Infospace performs well he will regain the credibility he lost--just remember that doing so is an ongoing process. He has accomplished much in rehabilitating his image but has much more yet to do. Also last year Infospace's revenues declined sharply as Jain restructured the business to focus exclusively upon recurring fee-based income. Twice last year management reset investor expectactions for financial performance substantially lower. This, I expect, has created an unpleasant hangover in the investment community as well even though it is now in the past. Infospace appears to have turned the corner, as evidenced by the first upward adjustment management has made in revenue expectations in six quarters during the last conference call. If Infospace performs well, including returning to profitability during the second half of the year, and Jain doesn't return to his boastful ways enough to make the investment community doubt his judgment or ability to deliver, Infospace will attract more and more investors and its current stock price will have been seen as an impossible dream. My advice to you is to check back in a couple quarters to see how things turn out. As for myself, I bought a boatload of Infospace stock at $1.18/share and have added a little more during the last couple days. Then again, I believe in the future of the wireless industrty, believe that Infospace has positioned itself well to benefit from the wireless industry's growth, and am a long term investor (more than two years). Good luck.
P.S. Contrary to many claims to contrary by some former embittered INSP investors, INSP is most definitely not headed towards bankruptcy. |
