Hey Mike,
I've given up on the theory that the market knows better how to value a stock and that it is efficient. That may very well be for old line blue chip stocks but I think history has otherwise disproven this theory.
This leaves us great opportunities. As an example, and I'm not speaking one way or the other on GMST, but GMST could very well be well undervalued and the Street just does not appropriately comprehend the true value of the agreements. If so, great time to buy and hold as the value will eventually make it into the stock price.
On the other hand, could be the Street is right, and these agreements are not worth more than a 13% increase in share price. If so, the stock won't rise in the future because of these deals as the fundamentals won't follow.
Personally, getting all that cash up-front is a great deal. I also see this as the true opening of the IPG as being the next great advertising platform. But that is speculative still, which might explain why much of the deal is not resonating on the Street yet. It is now of matter of show me rather than "I see it all coming together as a platform now."
If you think they are missing out, makes for a chance to make market beating profits. I personally think the Street is missing the true value of the deals, but it may still take a few more years to see it all come to fruition. I'm looking forward to the much more certain CE licensing revenues to start flowing through as DVDRs and HDTVs start to go off the shelves (still not quite at that mass market price point yet). They may be the first great revenue tornado, and if IPG ads can start resonating somewhere in the midst of that tornado we may be on to something good.
Tinker |
