Second Look: Evaluating a Monster Buyout (MWW, LNKD)

March 6, 2012 by Jon C. Ogg

Monster Worldwide, Inc. (NYSE: MWW) has finally managed to enjoy one positive day after hiring financial advisory service from Stone Key Partners and BofA Merrill Lynch.  The aim is not just assumed to be a buyout but to improve shareholder returns now that LinkedIn Corporation (NYSE: LNKD) and other social media outfits have begun to eat at Monster’s core job search database.

The move is not without challenges.  Monster and other job-search sites killed the newspaper classified business from the year 2000 on.  Now Monster is being eroded from social media and other crowdsourcing outfits that charge little to nothing.  The weak hiring market from 2008 to 2011 added the bulk of the damage, but the change that may have come about the most is user behavior of those seeking jobs.

Credit Suisse evaluated the chances of a buyout and other firms are mixed on the prospects.  Maybe it is a sale, maybe a unit spin-off.  Or, maybe Monster will just have to keep chugging along on its own.

The market believes that at least something positive could come from this.  Shares are up 9.7% at $8.25 and the market capitalization after today’s gain is $972 million.  Before getting too excited, keep in mind that the net tangible assets are now slightly in the negative per Yahoo! Finance data and the stock’s 52-week range is $6.34 to $18.47.  This stock was worth more than $30.00 at the start of 2008 and even higher before then.

JON C. OGG