Well, I just had to comment on the latest USWeb peculiarity.
They have announced a stock buyback plan. This is the latest in a series of contrived attempts to coax the stock price up. While this may have some short term impact (possibly) of making some shorts cover - don't fool yourself, that's all it is.
So, let's see:
1) I go public at $7 a share less than 1 year ago
2) I am not profitable and will not say when that might happen
and now,
3) I am going to buyback my own stock for $12 or more (?) with the money generated from an initial public offering at $7 !
This is just comical. There are 2 possibilities, here:
1) US Web actually does buy back some shares.
2) US Web has no intention of buying back shares, but is so desperate to increase the stock price (for whatever reason - sell insider shares, punish shorts, improve the CKSG merger situation), that it will try every trick in the book before it accepts that it must demonstrate value in it's business, and not in it's publicity machine.
My bet is number 2. Note the convenience of the fact that they cannot purchase any shares prior to the CKSG merger. So, why announce this dubious, silly idea ? These guys are living in the past - they remember how the silly, irrelevant, unfounded press release successfully moved the stock price in yesterday's stock market, and have yet to realize we are in a different market now.
US Web, uh, I mean ReReReReReReinvent Communications is well on it's way to becoming one of the defining stocks of the internet age - unfortunately the story is unlikely to have a happy ending for investors.
The one thing that is clear, though, is that the insiders and the Web shops that they have purchased all will have profited nicely. That's the way the game works folks.
Cheers. Rick. |
