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Marty, I'm actually pleased that Mr. Market has given us the opportunity to acquire additional shares in this excellent company with good long-term prospects at prices below what CMGI paid ($14.94) just a few weeks ago.
I first heard of OMKT years ago, but it was too pricey for my taste right after its IPO, trading up to $25 in late 1996. When it sold off below $10 in the Net sell-off last spring and then recovered, I nibbled on a dip and bought a few shares for myself and my daughter's UGMA in August '97. Then, early in '98, it rose rapidly beyond the range at which it offered a margin of safety. When it was over $25, I regretted not having bought more in August of '97. It blew off in a classic climax top in April, and has since being correcting.
Since its blow-off top over $25, OMKT's fundamentals and institutional support have strengthened. It has won patents, new major customers and alliances, and had an injection of equity capital from one of the savviest group of Net investors on the planet: CMGI. I expect that CMGI will facilitate OMKT systems adoption by the many companies in which CMGI has influence.
Is your dissatisfaction with the company's management based upon anything other than the drop in the stock price over the last few months? I don't believe that management can determine the price of their company's shares in the long run. OMKT got overbought during the last twelve months, and now I (and apparently CMGI) believe it is oversold by Mr. Market. Perhaps you know of something more fundamental that you can share with us.
If your dissatisfaction is with the pace at which they enforce their patents, I caution you to not underestimate the delays in the legal process. Preparing for the enforcement of a critical patent is a long, expensive process. Their efforts are likely to be vigorously opposed in the courts. It is not something done overnight or lightly. That may be one reason OMKT is gathering cash by factoring receivables (a smart financial move) and taking in additional equity capital from CMGI. Patent battles are expensive both in legal fees and distraction of management. They are, however, an essential part of patenting a product.
So, at these prices, I plan to average up.
Doug (long OMKT, basis <$11)
dougsimpson.com |
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