] HipMojo.com » Valueclick: when the music stops…

Valueclick: when the music stops…

Just because the tide is rising, does not mean all boats will rise.

Valueclick rose quite a bit in the euphoria surrounding online ad networks, to $35/share.  I was so close to shorting the darn thing, because anyone who knew the market well knew that VCLK’s business was very different to that of 24/7 Realmedia, aQuantive or Doubleclick.  The company’s stock fell back to $25 since rumors calmed down… and today, after announcing its latest results (22% spike in earnings) and cutting 2007 guidance, the company’s shares are down another 20%.

Be careful not to get caught up in the hype when it comes to M&A and investing.  And, anytime a company grows considerably via M&A over a period of quarters and years, it is bound to experience some hiccups along the way.  I’m not sure yet if this is a hiccup or a sign of slowing business fundamentals.  As the company’s market cap now sits at $1.99B, this puppy is getting back on my radar, but it will take a lot more to get me to dive back in to the stock.

Disclaimer: I owned VCLK in the past, but not at the time of this post.

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Posted By: Ashkan Karbasfrooshan | Jul 30th

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