Highly competitive field, margins will be squeezed.
The strong competitors are Amazon, Yahoo, Google, MSN, AOL and they have plenty of cash and brand name. ASkJ has no cash, has debt and then there are a number of smaller companies in the field as well. People dont use too many search sites, with the big five, forget askj and mama etc, they will be bought for a small fraction of wghere they trade or go out of business.
ISH with similar traffic patterns sold for 343 million, but ASKJ valued at $2 billion.
The hype is perpetuated by the media (witness CBS Marketwatch etc) and the brokerage houses, they are using straight line projections to arrive at 2004 and 2005 estimates and then CAGR going forward. They will just not work.
Once the favored clients get out:
1. The analysts will downgrade
2. The company will guide downwards
Then we shall see:
1 Class action lawsuits
2 The mangement would have mmade money. They wiill walk away with golden parachutes, in the meantime, they also made enough money selling their shares. Maybe one of them will get a slap on the wrist from the SEC, and if these management people contribute to the campaigns to the political parties, even that slap maybe a bit suspect
3. Class action lawyers will get rich
4. The analysts would have made money. They would have received fat bonuses and made good contacts, maybe one of them will get a slap on the wrist from the SEC, and if these analysts contribute to the campaigns to the political parties, even that slap maybe a bit suspect
5. The market makers and the hedgies would have made money
6. The convertible bond holders would have made money
7. The ISH owners made money
so who gets screwed, guess who:
you retial idiots, you retail morons, you will get that big stick in your rear end, you always do, in these stock con games. |
