For Sue and 'Hopper...
Okay, I sat down and read the much-ballyhooed Barron's article
by Eric Savitz. And here's my story... but, grab a cinnamon
role first and settle in...
* Well, it's certainly NOT a hatchet job on Internet stocks.
Nor is it any original analysis. It reports about the phenomenon
we all witnessed last week and even before. KTEL goes through
the roof on the basis of an attenuated connection to the Web.
Another company does the same. Sure, it's time for certain
sham plays to try to take advantage of the Web "frenzy." Using
press releases and strange business alliances to get into some
hot sector or weave a buzzword or two into a company's story is
ABSOLUTELY old news. What's new in my book--and not really covered
by the article--is the PHENOMENON OF WEB FEVER triple-heated by
WEB STOCK SPAMMING. Thus, companies like NETZ ( with
spammers trying to capitalize on the run of DCLK's IPO--a
remarkable run, indeed) and KTEL (which I stumbled across on
about four threads last week with hit-and-run mentions by somebody
who had never visited those threads before: kind of a tell-tale
vapor trail for a spammer) get whipped up into a fine froth with
the Web-speed blender. For those with a sense of what's reflexive,
it's fascinating to see the Web turning to itself as a subject--
with spammers spinning fables about this or that Web-related
(even though the relationship may be as strong as that between
me and my step-cousin) company AND company PR flacks ginning
out online press releases that in essence do the same blue smoke
and mirrors trick. Of course, this makes it all the harder, IMHO,
for the legitimate Web players.
* Then we get into Savitz's discussion of Cohen, the relatively
new ML analyst charged with covering the likes of LCOS, SEEK,
XCIT, and YHOO. Actually, I found this part interesting because
of Cohen's recent place of employment and reputation for a certain
independence. Still, and this thought is NOT original to me,
the whole ML "short-term neutral, long-term buy" is wonderful
gobbledygook... and cynical. (LCOS got a better rating than
the rest.) And sort of late to the game... playing catch-up ball
after the HUGE YHOO CELEBRATION which, IMHO, set the stage for
this week. What I find interesting here is that, vis a vis SEEK,
I remember that Bruce Smith used to be the ML analyst. In fact,
it was Bruce who used to do rather glowing interviews on the
topic of SEEK around the time of the SPO. So, where's Bruce?
And what's Bruce's story? (There could be some serious cynicism
in play here.) Was Bruce just along to help build SPO buzz and
the afterglow. Has he got new digs and a new story somewhere
else? Ahhh, analyst games. Such fun. Check their positions
before you take a word very seriously.
* Then Savitz does the STUPIDEST THING he can. He shows
a REAL IGNORANCE OF HIS TOPIC by somehow equating SEEK's purchase
of an online community with the purchase by ICC Technologies, a
humidity-controls company, of Rare Medium a web site development
company. He calls this a "method." Well, you could ask for
no more of an apples vs. oranges situation. SEEK's PRIMARY
FOCUS is and was and will be the WEB. Thus, its purchase of
WBS--at a bargain-basement price--was not some weird grafting
of something boring onto something glittery--it WAS JUST PLAIN
SMART. And overdue. For SEEK, as I and others had pointed out,
was in need of a COMMUNITY focus or at least a community component
to build page-views, site visits, and enhance value for their
advertisers. Savitz would argue, I'm sure, that he was just
reporting, serially, some Web--related purchases that drove stock prices up.
But, I'm sorry, he's guilty here of not sorting out the wheat
from the chaff. Maybe, ICC Technologies' deal wasn't a cynical
marriage to try to get some of the Web PR froth going for it...
but, a HUMIDITY-CONTROLS company... PuuuhLEASE. Not even on the
same planet as SEEK. Worst part of the article by far... because
of the damnable things it sticks between the lines.
* Finally, the article gets to Michael Murphy, hia newsletter
and his advice to short SEEK. Well, according to some quick
research last night, Murphy isn't exactly seen as a genius or
savant when it comes to stock-picking. It seems he got a little
overwrought in the biotechnology area a while back. And was hugely
wrong. Plus, in the article, his damning of YHOO on the basis
of its doing a bad job for advertisers is, well, half-right at
best. Our company isn't crazy about YHOO's approach to advertising...
because if you don't have mega-bucks to advertise, they don't
have much to offer you. SEEK's clickthrough rate kicks YHOO's
bee-hind. But, Murphy, I betcha doesn't know thing one about
REVENUE-SHARING DEALS and how the Web is being won by DIRECT
MARKETING... because of the medium's ability to target and gather
information and build customer knowledgebases. In short, Murphy
don't get it, folks. And, while I will listen to anyone on this
topic, I especially dislike those WHO DON'T OF WHERE THEY SPEAK
but seem to have a STRONG NEGATIVE or POSITIVE opinion.
That's all I can think of about the article. Oh,
it does end with a cautionary note about the dangers of shorting
these stocks. Well, DUHHHHH. Did anybody check SEEK's short
interest... fuel for the rally... ?
Best Regards To All SEEK LONGS,
c m |
