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abh - I agree
I also believe that Giura was a big seller - it seems like lots of the selling came from one person, and he's the only one with enough shares where a filing would be unnecessary. I expect the law suit to be put to bed shortly, and I expect that they will close one or both of the previously announced deals. After that we can look for earnings. As much as the past few months has been negative, I expect several positives over the next several weeks.
Bo
abh-
I think there was some panic selling recently. Some had given up on believing anything good about this company. If today should have been a non event, then when the numbers come out it should also be a non event. There is no way, however, that .20 to .25 is priced into these shares.
birdbrain -
To my knowledge, none of them have sold, that's what makes the decline especially painful for myself. I'm still looking for double digits before I even consider the shares fully valued. Of course, by that time the company may pull off some REALLY accretive mergers, the shares will be on radar screens all over the Country, and I'll probably be right here saying that 20 is likely!
Bo
My phone rings:
"I just read your post, the short position is not that high, why would anyone WANT the share price down to this extent?"
No, the short position is not that high, however:
Perhaps an investor group presented a potential acquisition candidate to THK and they had no interest at all,ticking off the firm.
Maybe THK is in talks with a group who feel that if the price was two, and not three or four, they may want to sign a LOI.
Could it be that a large firm wanted to fund one or all of the PP's, but at a price the company found unacceptable?
I'll bet some hedge fund manager watched this stock go from a buck and a half to 6 in a blur, and decided that at two, this could be the play of a lifetime.
Perhaps some of the BILLIONAIRES that own this stock have made some enemies along the way that don't want the rich to get richer.
My point is that there could be a thousand reasons to want this stock down besides short positions, and when internet bloggers start posting outright nonsense, they are doing so for a reason!!!!!
In the end the numbers will do the talking.
abh, I'm sorry -
Rereading my last post, I sound stupid, kinda like "tell me something I don't know." Please understand that I have had some pretty good winners, and I actually have told quite a few people about this stock - they bought. If it was posted somewhere on the net that Gerry Jacobs woke up with a headache, my phone would ring with some one telling me to bring him an aspirin. My point is that it took some great research for you to come up with those blog postings, and I am certain that it indeed has helped to put pressure on these shares. That's why I always say that in the end, the numbers will do the talking. All this BS floating around hurts in the short term, but IMO will only fuel the shares in the opposite direction when the true growth of THK is known!
Bo
abh -
I was aware of those comments, but I certainly was not going to post them and lend any credence whatsoever to those "paid to bash" bloggers. I don't believe for one minute that guys like Jacobs and internet guru Mitchell agreed to purchase PA without knowing every single thing there is to know about the company, it's past, and where it is headed next. I also believe that this lawsuit has hurt the share price, but at worst I expect an injunction compelling Direct Access to meet their contractual obligation - at best I would like to see the suit expanded to demand damages from Direct Access for some of the incredible statements they made in that press release, especially using CGI Holdings ticker symbol so that it would automatically be posted to nearly all search companies financial boards! I also 100% guarantee you that when the PA deal was signed and completed, there were contingencies on top of contingencies for things that happened before the merger was complete. Keep up the great research, but remember THERE IS a group out there that for one reason or another WANTS this stock down!!!
I completely agree with you guys -
However, I don't believe that THK will pass up a really good deal because Wall Street is currently not cooperating. I also believe that any debt will eventually be erased when the shares are higher, by means of a secondary.
Bo
From yesterday's Red Herring:
For those who thought online advertising had peaked, it turns out there’s still some climbing room at the top.
Investment bank Pacific Crest released a report Thursday saying that online advertising will accelerate in the second half of the year.
Online advertising hit $8.4 billion in 2004, according to Jupiter Research. Analysts at Pacific Crest estimate the market grew in the range of 25 to 30 percent in the first quarter, and expect it to grow at the same pace in the second.
For the second half of the year, they believe online advertising will beat those numbers.
Part of the reason for this growth is that online advertising has become more accepted, as traditional advertisers have integrated it into their marketing campaigns. And new advertisers are coming aboard, as search companies offer programs targeting small and mid-sized businesses.
“Search is dominated by mid-sized businesses,” said Steve Weinstein, an analyst at Pacific Crest. “In terms of numbers, it would have to be small businesses” that are new advertisers.
- ADVERTISEMENT -
The report says growth in international markets will surpass growth in the United States. At this point, international markets generate more than half the search volume and one-third of revenue.
Much to the advantage of Google and Yahoo, those who had expected paid search to decelerate this quarter have been proven wrong. Mr. Weinstein had also anticipated that the law of large numbers would kick in.
“You can’t compound these kinds of growth rates forever,” said Mr. Weinstein.
But at this point, the law certainly isn’t kicking in. Pacific Crest estimates Yahoo’s second quarter revenue should be in line or better than its expectation of 45.3 percent revenue growth to $884.4 million.
Google will also probably beat expectations again, with the bank projecting that net revenue would range between $834.4 million and $877 million in the quarter.
I respectfully disagree -
When the shares are down, the acquired firms get the same dollar value worth of stock - which means more shares. They hear the whole story, and they are able to put their own peg on the value of the shares. If the shares are down, but the story hasn't changed, it is the ideal time for the firm being acquired to close the deal. Hell, an argument could be made that firms in negotiations with THK would go to some length to keep the shares down. JMHO.
Bo
I hope they acquire another dozen companies this year.
I understand how you feel, and I know others feel the same way, mainly because the stock has been a poor performer lately, but that's not what this company is all about.
Far from a mature business, the internet is still in it's infancy. THK is out looking for the companies that have developed the concepts and the tools to turn the internet into big bucks......now and well into the future. As they add new legs to this company it becomes less dependant on any one division, and I believe that there is a strong liklihood that they will hit on a few mega stars along the journey. Imagine if they grab the next Ebay before it becomes the next Ebay....if you follow my logic.
The company did not miss the first quarter, because they did not give guidance for the first quarter. Looking back, when they gave annual guidance without quarterly quidance, it may have been a clue that the year was going to be back end weighted.
One great advantage that this company has is WebSourced. The other businesses that they purchase will all have a built in marketing machine to drive them.
I know that these shares have been disappointing lately. However, I have noticed in recent days that the selling seems to have very much dried up, although the shares have continued to drift lower. All this company needs is a spark....and I really believe that the spark will once again ignite a bonfire! I hate the phrase - patience is a virtue, but it is...
CoolGuy -
And that is if they stop acquiring companies right now, and the current companies just continue their present growth rate. The way they are operating, there could be a dozen more acquisitions come '06!!! Now do the math!!!
Bo
I'm not an accountant, but
Im my opinion, after reading the entire filing, this is the most important part:
PRE TAX PROFIT (LOSS) FROM CONTINUING OPERATIONS
--------------------------------------------------------------------------------
2005 2004
------------------------------------------- ---------------- -------------
Search engine enhancement $1,321,215 $1,034,372
Online Dating 409,224 0
Advertising 168,277 0
Software, Systems Development and Hosting (268) 0
Other (473,628) (74,903)
---------------- -------------
Total $1,424,820 $959,469
---------------- -------------
The net fully diluted pre-tax profit from the four operating units was 4.7 cents+. I'm not sure what the 473,628 deduction is, but guessing one time expenses stemming from the acquisitions. The company surpassed 10 million in quarterly sales, which I find amazing, and they had positive retained earnings for the first time. Looking ahead, setting aside one time expenses, and adding Primary Ads to the equation, the numbers are going to get much better. This continues to be a developing story, and I continue to be very happy with the picture that is shining through.
abh3vt -
I was aware of that. That is why everytime on the other message board when someone complained about the "insider" selling, I would respond by posting that I did not see ANY recent insider selling. I always expected someone to post the trust filings so that I could point out to them what you just posted to me. I just really wish that what the trust does or doesn't do would become a completely irrelevant topic.
Bo
abh3vt -
I have to admit, I have also been counting those shares. However, truth be told, after reading through the most recent SB2 filing, I see that the Jacobs trust was funding this company as early as 2002. At that time this company had absolutely nothing whatsoever going for it, except for a hodge podge of nearly worthless companies. Talk about risk capital! It is my strong opinion, considering those circumstances, that any and all filings by the Jacobs trust should be viewed as payment for risk taken that would have been intolerable for most investors. It appears to me that sales completed by the trust have always been controlled and for a rather unspectacular number of shares considering the trust holdings. In a way, the trust has provided some liquidity for new money that may not have been willing to "pay up." As liquidity increases I would expect trust sales to have no effect whatsoever on the share price.
In addition, and I got laughed off the RB board for this thought - when the trust sells, things are AOK at the company. There were no sales for over a month while we were waiting for fourth quarter numbers, which missed. I believe that when Mr. Jacobs realized that certain issues were going to reduce earnins, he instantly stopped his systematic selling. I could be wrong, but I believe that recent sales are a good indication that the numbers are back on track. Obviously we will know for sure very soon.
Regarding Personals Plus - can you believe how little THK paid for that company? Just another indication that these shares are alive and well and working hard to build nice shareholder value.
Bo
BO-MAN bashing -
I feel certain that I will have the last laugh. I gotta love the bashing, I don't think that they, or he.....how about it, would knock every word that I say unless they believe that I'm probably dead on...
There is a new show on TV called numbers. It's premise is that EVERYTHING can be determined by use of mathematics. I sort of believe that. How about these numbers - THK grew 800% last year. Mr. Jacobs has said that this year will come in at .20 to .25 for a 100 to 150% growth rate. Many hyper growth stocks garner a P/E as high as their EG. If we get half the P/E of our earnings growth we would sell at a P/E of 50 to 75. We can all do the math, but I assure you that it is a two digit number!!! On top of that soon we will be half way through this year and talk will turn to '06, with the acquisitions going on, and every acquired company being a growth engine, I'm willing to bet that the numbers will continue to go up, up, up....
Now what kmikey, or where-is-my-money will do is post this post over on RB and rip it to shreds....I gotta love it!
Bo
CoolGuy -
When I say that I think that I get it, I'm not talking about the current share price, I'm referring to the long term value this company is building for shareholders.
The current share price reflects a miss in the fourth quarter, Pat Martin being ambushed on Mad Money with Jim Cramer, and a very weak group (take a look at FWHT).
The entire negative momentum can begin to shift rather dramatically if the company posts solid first quarter results. We will see very shortly.
Bo
ChiTea -
I just got home from an all day seminar and I have another tomorrow. Tonight I have a very important meeting. I'm looking forward to replying to you, but I guess that looking at my schedule it won't be until this weekend. I really believe that I do "get it". Lately I've sometimes felt like nobody else does.
Bo
I don't have the premium service
which apparently lets you send private messages. No, I never did speak with Mr. Jacobs.
Just a guess,
Primary Ads, which had '04 net of around 4 mil, is close to closing.
Peeker -
The Jacobs trust was selling 10000 shares per day for a long time and then stopped about a month and a half ago. My guess is that when they found there could be an accounting issue in the fourth quarter, the trust decided to wait until after the results. Nobody believes me, but I actually look at that filing as a good thing - the trust has never sold prior to bad news. Kellogg and Granite are not insiders, they participated in the private placements and are getting their shares registered.
Bo
Which sales are you referring to?
Until Jacobs filed yesterday, I had not seen an insider sale since January.
Bo
abh3vt -
I have PLENTY of questions about the 10K. I would also like to speak with Gerry, but decided to give him a few days, I suspect his phone has been ringing. The company did hire a much larger accounting firm in order to qualify for the AMEX, and I'm guessing they forced THK to book some items "differently." My BIG question to you is this: I did not see where the company withdrew '05 guidance. Can you please tell me where you saw that . Thanks in advance.
As for Kramer, Pat went on the show to tell CGI's growth story and got blind sided by one of the more arrogant people in the business. Kramer did not mention that all of the private placements have been sold out. He didn't mention that funds raised from this process result in shares of restricted stock, that could take over a year to get registered.
As for Schmolton's article - it is interesting, but I really don't think that it applies much to us. By my calculations, we are currently selling at a huge P/E discount to nearly all stocks in our group, yet I continue to believe we are growing the fastest!
break80
At that Roth conference Mr. Jacobs said that Scott Mitchell graduated grade school and went right to college. I didn't know that he had all those other positions on his resume. I guess it's obvious why CGI keeps purchasing companies in the dating space, they have a top notch - I hate to use the term genius, but if the shoe fits...... at the top. It sure sounds like Mr. Mitchell can do what he wants in that space, it also makes me wonder how close Mr. Diller is paying attention to this one!
I frequently break 80 - would you like some tips, or are you referring to 18 holes?
Guidance -
I think that they just found out that the very nature of their business makes giving guidance difficult. If the company had not purchased the Market Smart Companies, and completed the private placement to fund that purchase as well as Personals Plus, Kowabunga, Ozline and others, the quarterly number just released would have been more than double. At the same time we all know that these purchases will add dramatically to the bottom line moving forward.
By my math, if the purchase of PrimaryAds gets completed, the company will once again turn to the market place for additional funding. So far they have completed three private placements - the first at 1.60, the second at 2.05, and in August they completed a round at 3.50. The last two rounds included warrants. The success of these three placements makes going back to the capital markets a piece of cake. I believe that CGI has purchased 8 (eight) companies since I began purchasing these shares in December of '03. I would not be at all surprised if another eight deals were completed by the end of '05. This company is growing and evolving at a nearly unimaginable rate!
Foreign private companies
are difficult to find info on. What I found significant about the press release was that it says that Websourced is the world leader and that they currently have over 1400 customers. On Feb. 7th, I believe, when another acqusition was announced, the PR said that Websourced is the world leader with over 1300 customers - that's nearly 8% more customers in a month and a half.
Bo
SOX
I don't think it should matter to much Schmolts. I believe it would be shown as a one time Sarbanes Oxley expense, and should not effect operating earnings which is what the market will be looking at. With the most recent acquisitions, especially when the Primary Ads deal closes, I expect we may see guidance raised. After all, in the Primary PR, we were told that the net PreT was over 4 million - that alone adds somewhere in the neighborhood of 7-8cents! I'll never forget when a similar company, Aptimus (APTM) raised guidance. The stock went on a taserlike run, the kind I still believe we will one day witness with this one!
Bo
San Francisco Chronicle
There is an article in yesterday's edition that talks about "thousands" of publicly traded companies that are scrambling to meet this quarters filing deadline due to section 404 of the Sarbanes Oxley act. Very large cap companies apparently get an automatic compliance extension, which really doesn't make sense because large cap companies would generally have the resources to afford them to be compliant. The article gives an example - Conceptus Inc., which does 11.5 million in sales but had to cough up 1.5 million to be compliant under section 404. I don't know if this is the reason for the delay in THK's release, but it would certainly make sense. Regardless, the delay in filing certainly has not squelched the companies appetite for private, profitable internet companies. Another announced today!
Bo