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  1. #1
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    ValueClick gets Hammered
    Stock down 25% today....wiping out years gains:

    Article

  2. #2
    Lite On The Do, Heavy On The Nuts Donuts's Avatar
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    some quotes from the article, my bold:
    ~~~~~~~~~~~~~~~~~~~~
    Chief Executive Tom Vadnais said that ValueClick suffered from an ongoing slowdown in its promotion-based business that began in May and stretched into June. Vadnais said the company was pleased with the results from its non-promotional media, technology and marketing affiliate businesses.
    ~~~~~~~~~~~~~~~~~~~~
    At Needham & Co., analyst Mark May left his hold rating on ValueClick's stock unchanged, saying that while he believes the stock's current valuation looks attractive, "we believe there could be further earnings risk related to the promotion lead [generation] business," as well as spending cuts from lareg clients such as eBay Inc. and Blockbuster Inc.
    ~~~~~~~~~~~~~~~~~~~~

    from ValueClick itself - disclosing the FTC is looking into their promotions:
    http://biz.yahoo.com/e/070522/vclk8-k.html

    So I think the MeziMedia buy (http://biz.yahoo.com/e/070718/vclk8-k.html) looks more clear to me now - the FTC scares you away from certain types of promotions, you get sued for spam in Washington state, you're being sued by merchant/affiliate for adware / spyware repercussions - you have risk in lost revenue if any of those things are slowed down or stopped, so you buy something you're not going to get into hot water over. One troubling thought is, if adware has been profitable for you, can you cast it aside? Wonder how long it'll be before Kellie checks on Mezi's use of adware...

  3. #3
    Defender of Truth, Justice and the Affiliate Way
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    For anyone interested, there is a recording of the Earning Call available on Yahoo. Go to Yahoo Finance, do a ticker search for VCLK, then right below the stock quote graph is the link. The link isn't going to last, so I'm not posting it. In about a week, a recording of the call will be available on the ValueClick corporate site under Inverstor Relations area.

    There was quite a bit of discussion in the call regarding both the FTC investigation and the MeziMedia acquisition. VC said several things that I found very interesting on both.

    So I think the MeziMedia buy (http://biz.yahoo.com/e/070718/vclk8-k.html) looks more clear to me now
    That was my initial reaction when I heard about the acquisition. Seems a pretty good way to quickly shore up revenue figures if you are losing them in another area. Especially with about 2/3 of the potential price is tied to performance of Mezi down the road (say maybe in Q4?). VC gives figures for both how much their lost revenue wise in the promotion area related to the FTC investigation and how much they expect to generate in revenue from Mezi for the rest of this year (5 month period).

    I also found it interesting that when I went back to the Smarter.com site after the purchase was announced, all reference to the SmarterCompanion (adware shopping comparison app) are gone and the download page gives a 404. Seems like a logical move on someone's part considering the class actions suits. I'm not sure when it came down but was still there earlier this year.

  4. #4
    ABW Ambassador La_Valette's Avatar
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    haven't been following their stock, but i'm guessing it had a huge runup recently with the google/yahoo/msn buying binge, so a 25% drop probably isn't that much of a big deal if you put it in perspective...
    Kids, you tried your best and you failed miserably. The lesson is, never try. -- Homer Simpson

  5. #5
    Lite On The Do, Heavy On The Nuts Donuts's Avatar
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    there was no huge runup, just long term sustained growth - see 1-year chart attached. they met or exceeded earnings forecasts for 6 straight quarters, never missing. first time miss just now, got hammered for it. this drop has little to do with buying binge that has been going on - look at the timing in the chart. i will say that this drop makes them a lot cheaper to buy, and that buying frenzy is real - i'd say yahoo M&A folks are sitting down right now and taking another look - valueclick is essentially "on sale".
    Attached Images Attached Images

  6. #6
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    "If ValueClick stays at current levels for an extended period of time, we would expect it to become a merger and acquisition target," Squali wrote.

    http://biz.yahoo.com/ap/070731/value...bell.html?.v=1

  7. #7
    Moderator MichaelColey's Avatar
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    There was lot of buying in the first 30 minutes of the day, but it's been going down on lower volume the rest of the day. It looks like it's going to continue to decline for a while.
    Michael Coley
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    "Education is the most powerful weapon which you can use to change the world." Nelson Mandela

  8. #8
    Affiliate Manager Howard Gottlieb's Avatar
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    Interesting time in the market. No telling these days which way to go. In a jittery market people tend to overreact. Too many strong stocks get pounded for barely missing aggressive analyst expectations. I have lost too much money over the years buying the next acquisition target though!

  9. #9
    Lite On The Do, Heavy On The Nuts Donuts's Avatar
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    Quote Originally Posted by visitourmall
    Too many strong stocks get pounded for barely missing aggressive analyst expectations.
    True, but wasn't the case here. The pounding came from this:

    "Chief Executive Tom Vadnais said that ValueClick suffered from an ongoing slowdown in its promotion-based business that began in May and stretched into June. Vadnais said the company was pleased with the results from its non-promotional media, technology and marketing affiliate businesses."

  10. #10
    Lite On The Do, Heavy On The Nuts Donuts's Avatar
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    Quote Originally Posted by MichaelColey
    There was lot of buying in the first 30 minutes of the day, but it's been going down on lower volume the rest of the day. It looks like it's going to continue to decline for a while.
    Ah Coley, spoken like a true trader! That buying may have been short covering (those who were betting against the stock, made a bunch and are unwillingly to bear further risk, so they buy to exit their short position). Short covering volume looks like normal interested-in-the-stock buyers, but is often folks taking profits and creating short-lasting, artificial-interest buying volume. As the short open interest lowers, through buying, that short covering normally goes away - along with it, the support volume. So this may be an artificial stopping point, on the way down.

    Now, everything I said here is a guess. Who knows where this stock will head. One little buyout rumor could shoot it way back up again. This one's a roller coaster that surely holds a thrilling ride for anyone gutsy enough to get onboard.

    I hold no positions whatsoever with this stock and never have and I'm not a lawyer, financial consultant, broker, counselor, rhythmic gymnast or chef, just an opinionated affiliate marketer.

  11. #11
    Moderator MichaelColey's Avatar
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    The market seems to punish disappointing outlooks more than disappointing results (and rightly so).
    Michael Coley
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  12. #12
    Affiliate Manager Howard Gottlieb's Avatar
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    Don't know if I agree. I've seen the stock of too many lousy companies go through the roof when they don't do quite as bad as expected even though the results were awful. I think expectations or the outlook for the company are already priced into stocks and it is surprises - either positive or negative - that fuel these drastic moves.

  13. #13
    ABW Ambassador Sam Bay's Avatar
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    "Chief Executive Tom Vadnais said that ValueClick suffered from an ongoing slowdown in its promotion-based business that began in May and stretched into June."

    Haha. This is good. Those "promotion-based business" were these free item offers (free ipod, free laptop etc.) that VCLK was running with fabricated company names, whois regsitrations, behind the curtains.

    Why the slowdown in May? Because that's when FTC decided to look into the "matter".

  14. #14
    Lite On The Do, Heavy On The Nuts Donuts's Avatar
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    Yep, the drop is caused by the lead gen stuff, thank to the FTC:
    Finding Value in ValueClick
    http://www.fool.com/investing/high-g...alueclick.aspx

    a report about the FTC inquiry that started the ball rolling:
    Win a Free FTC Inquiry! (love that headline!)
    http://www.fool.com/investing/high-g...c-inquiry.aspx

  15. #15
    Lite On The Do, Heavy On The Nuts Donuts's Avatar
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    quote from that FTC article:
    ~~~~~~~~~~~~~~
    At the very least, this could be the beginning of the end for some of the WebClients-owned sites like PinkPhone4Free.com, which feast on collecting contact information from unsuspecting applicants who are unlikely to ever jump through enough hoops to receive their diamond-studded cell phones.

    In the past, the "free" brands were the ones lashing out at ValueClick on the basis of trademark infringement. The company's WebClients arm settled a lawsuit with Wal-Mart (NYSE: WMT) last year, after a dubious campaign that promised $500 Wal-Mart gift cards as an incentive. Now it's time for the regulators to do their sniffing.
    ~~~~~~~~~~~~~~

    Wal-Mart had to sue ValueClick to get them to stop leveraging Wal-Mart's brand name and dubiously promising $500 "free" gift cards. You big brand merchants with CJ are being hoodwinked. Hahahaa!

    And you wonder where that type of spam comes from, I bet?

    Of course, CJ's not even slightly responsible for policing it's own network, according to them:
    http://forum.abestweb.com/showthread.php?t=92590

    Suckers!

  16. #16
    Full Member kea12345678's Avatar
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    Quote Originally Posted by visitourmall
    Don't know if I agree. I've seen the stock of too many lousy companies go through the roof when they don't do quite as bad as expected even though the results were awful. I think expectations or the outlook for the company are already priced into stocks and it is surprises - either positive or negative - that fuel these drastic moves.
    I think that is correct, it all about expectations. I think there were high expectations with VCLK, but those expectations are now highly diminished.

  17. #17
    The slot machine that IS paid! Billy Kay's Avatar
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    I went to the freepinkphone site...

    Not only do YOU have to be stupid enough to jump thru the hoops (complete 4 gold offers, 2 platinum offers, etc)

    Refer one (1) unique household that also must complete these requirements.
    You'd also have to find someone as stupid as yourself to get the phone!!

  18. #18

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    At Needham & Co., analyst Mark May left his hold rating on ValueClick's stock unchanged, saying that while he believes the stock's current valuation looks attractive, "we believe there could be further earnings risk related to the promotion lead [generation] business," as well as spending cuts from lareg clients such as eBay Inc. and Blockbuster Inc.
    The part here interests me. Ebay in June upped their ACRU to $25 per, and up their commission structure. If this is a sign of "spending cuts" then I am confused?

  19. #19
    Moderator MichaelColey's Avatar
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    My take: "spending cuts" could mean one of two things:

    1) Merchants negotiating lower network fees.
    2) Merchants moving some or all of their business in house or to another network.
    Michael Coley
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  20. #20
    Defender of Truth, Justice and the Affiliate Way
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    If you listen to the actual earnings call, the spending cuts related to Ebay had to do with Ebay taking the Search services CJ had been providing for them in-house.

    Blockbuster had to do with a new CEO and restructuring going on with Blockbuster in general.

  21. #21

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    I see that ebay Media Marketplace - Radio is now in the offers on CJ.

  22. #22
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    What search services?
    Quote Originally Posted by Kellie aka Ms. B
    If you listen to the actual earnings call, the spending cuts related to Ebay had to do with Ebay taking the Search services CJ had been providing for them in-house.

    Blockbuster had to do with a new CEO and restructuring going on with Blockbuster in general.
    What search services had CJ been providing EBay? EBay's been managing their paid search internally since Q3 2005, prior to which they were working with Efficient Frontier.

  23. #23
    Moderator MichaelColey's Avatar
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    Another down day, with the price dropping below $20, nearly 50% below their 52 week high and rapidly approaching their 52 week low.

    There was also an 8-K filed yesterday with details about Vadnais' raise and the MeziMedia acquisition.

    With a forward P/E of under 22 (based on next year's lowered earnings estimates), it'll become a value play if it drops much more.
    Michael Coley
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  24. #24
    Lite On The Do, Heavy On The Nuts Donuts's Avatar
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    http://biz.yahoo.com/seekingalpha/070805/43532_id.html

    somebody's opinion from the article here, thought it was interesting:
    ~~~~~~~~~~~~~~
    I would expect more consolidation in this sector as companies like ValueClick look to expand their reach by acquiring smaller players. For example, popular sites like FatWallet.com, Shop4Zero.com, FlamingoWorld.com, and eBates.com could all be targets of future acquisitions.
    ~~~~~~~~~~~~~~

  25. #25
    Moderator MichaelColey's Avatar
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    Strong selling again today, pushing CJ under $19 (down over 3%) within the first 10 minutes, while the market as a whole heads up.
    Michael Coley
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