The Global X Social Media Index ETF tracks the Solactive Social Media Index, and the three largest components in the underlying index are DeNA Co., Sina Corp. (NASDAQ: SINA) and Netease.com Inc. (NASDAQ: NTES) at 10% exposure each.  Other components are Google Inc. (NASDAQ: GOOG) at 4.75%, Yandex N.V. (NASDAQ: YNDX) at 4.75%, Renren Inc. (NASDAQ: RENN) at 4.75%, and Groupon, Inc. (NASDAQ: GRPN) at 4.75%. Other components in the Solactive Social Networks Index which were not given up by name nor by weighting come to 28.15% and two of the names shown on the Solactive breakdown that were not identified by Global X were LinkedIn Corporation (NYSE: LNKD) and United Online Inc. (NASDAQ: UNTD).

This is the first ETF of its kind with a focus on social media companies.  The aim of the ETF is to includes companies “from all over the world that provide social networking, file sharing, and other web-based media applications.”

We won’t bother sharing the growth figures because you have already heard them in some iteration or another.   The index will be adopting new companies as they come public and it even noted that it will “capture these new companies shortly after their public debut.”

The international country exposure is as follows:

• China 36.28%
• United States 26.22%
• Japan 19.95%
• Russia 9.55%
• Germany 2.28%
• “other” 5.65%

Does it seem a bit odd that China is the leading nation in social media’s weighting here considering that the powers that be in China restrict more web usage compared to Western nations?  That may change after Facebook comes public but it is a bit difficult to fathom today.

Needless to say, this is not an ETF which is suitable for widows and orphans.

JON C. OGG

American Water Works Company, Inc. (NYSE: AWK) has so far not really pulled back at all since we named it as one of ten stocks to own for the next decade.  Investors want to own the shares but it hasn’t given an opportunity as the $26.62 price is against the 52-week range of $19.41 to $26.88. The company meets investors this coming Tuesday.

Apple Inc. (NASDAQ: AAPL) was a part of the Barron’s cover story as #1 for “The Most Respected Companies.”  The companies behind it, Amazon.com Inc. (NASDAQ: AMZN) and Berkshire Hathaway Inc. (NYSE: BRK-A).  Speaking of Amazon, Alan Abelson gave the bearish side of the stock of the ecommerce giant.

AT&T Inc. (NYSE: T) is losing customers to Verizon Communications Inc. (NYSE: VZ) probably worse than expected due to the new iPhone launch this last Thursday.   Workers at two different stores locally this weekend during my attempt to upgrade said that over half of the iPhone buys were actually AT&T customer defections who were moving to Verizon.  If that continues, the risks for AT&T may remain higher than some have considered.

Speaking of Berkshire Hathaway Inc. (NYSE: BRK-A), it has its latest holdings due this week.  The latest portfolio had many big changes from the prior quarter and this will set what Buffett holds for 2011.

Big Lots Inc. (NYSE: BIG) was up almost 2% on Friday on expectations that a buyer would emerge as early as this coming week.  Shares went from $34 to $39 on the news that it was up for grabs, and closed out the week at $41.57 with a new 52-week range of $27.82 to $41.59.

A new study from The Pew Internet and American Family Life Project shows that high-speed broadband is not important to most citizens at all–particularly if they have to pay for it with higher taxes of an expanded deficit. “By a 53%-41% margin, Americans say they do not believe that the spread of affordable broadband should be a major government priority,” the study says. It is counter-intuitive, but “non-internet users are less likely than current users to say the government should place a high priority on the spread of high-speed connections.”Sixty-five percent of Americans have broadband access now compared to 63% a year ago. That is not much of an increase if people are hungry for better service. African American adoption rose much more quickly over the same period–22%.

The mystery about the lack of desire for faster connection speeds may not be a mystery at all. The FCC and other broadband-for-all advocates assume that ever American wants or needs a better connection or any connection at all. Some US citizens view the internet as an intrusion into their privacy–a place rife with fraud and people who want to steal their credit or identities. This concern is not unwarranted.

Another reason that some people do not want broadband is that dial-up serves their needs. There are still ISPs including AOL (NYSE: AOL) and United Online (NASDAQ: UNTD) that provide dial-up services to hundreds of thousands of people. Some of these people are infrequent users of the internet. Others only access sites that world fine on 56k connections.

The last and perhaps most important reason the many people do not care about fast home internet connections is that their primary access to the worldwide web is through 3G handheld devices like smartphones, tablets, and light laptops. There online connection speeds are fast and with the advent of 4G, they will become faster. People who use these devices already have what they need It is just not brought to the home by a wire.

Douglas A. McIntyre

Chesapeake Energy (CHK) Cut to Hold at Argus.
DuPont (DD) Raised to Perform at Oppenheimer.
Fortress Investment Group (FIG) Raised to Outperform at KBW.
Fifth Third Bancorp (FITB) Cut to Market Perform at KBW.
Kindred Healthcare (KIND) Cut to Hold at Jefferies.
March & McLennan (MMC) Raised to Market Perform at KBW.
Mobile Mini (MINI) Cut to Hold at Needham.
SunTrust (STI) Cut to Market Perform at KBW.
United Online (UNTD) Cut to Hold at Jefferies.
ValueClick (VCLK) Raised to Buy at Merriman Curhan Ford.

JON C. OGG
AUGUST 6, 2009

Internet                              Aug 29       Aug 15      Change
Amazon.com (AMZN)     27,684,633   28,183,474    -1.77%
eBay Inc. (EBAY)          34,620,483   33,432,230     3.55%
Google Inc. (GOOG)        5,802,455    5,565,930      4.25%
United Online (UNTD)       9,459,533   11,923,542   -20.67%
ValueClick (VCLK)         10,404,439   11,421,716    -8.91%
Yahoo! (YHOO)              41,153,923   37,879,991     8.64%

Jon C. Ogg
September 11, 2008

FTD shareholders will receive $7.34 in cash, 0.4087 shares of United common stock per FTD share, and $3.31 principal amount of United Online in 13% senior secured notes due in 2013. This total consideration, before any share change in UNTD will equate to $15.08 (based upon $10.83 United share price.

This furthermore comes to an total consideration received of $456 million to FTD, composed of $222 million cash, 12.35 million shares of UNTD, and $100 million in the debt.  After payments and disbursements have been made, FTD holders will still own approximately 15% of the combined United Online.

To complicate things further, United Online may elect to increase the cash consideration payable to FTD’s
stockholders by $2.81 in full substitution of the debt, so FTD stockholders could receive a total of $10.15 in cash and 0.4087 shares of United Online per FTD share.

We had featured United Online in our "10 Stocks Under $10" weekly newsletter, and one issue of our "Special Situation Investing Newsletter" featured United Online as one of teh small cap Internet stocks that could actually be rolled up by a larger player.

So far UNTD shares are up almost 8% pre-market on thin volume trading, and FTD shares are up almost 7% in pre-market trading; although the share volume was very thin.

You can join our open email distribution list to hear about previews for other mergers, spin-offs, break-ups, IPO’s, special financings, and other special situations.

Jon C. Ogg
April 30, 2008

Jon Ogg produces and edits the Special Situation Investing Newsletter for 247WallSt.com.

In the early morning we’ll get to see earnings out of EarthLink Inc. (NASDAQ: ELNK).  The estimates from First Call for the Internet access and communication provider are $0.15 EPS on $280.96 million in revenues, but be advised that the estimates vary greatly. Next quarter estimates are $0.21 EPS and $290.17 million in revenues, and fiscal 2008 estimates are $1.01 EPS on $ 1.07 billion in revenues.  Analysts have an average price target of north of $9.00.  At its last earnings, EarthLink gave a fiscal free cash flow target of $200 to $240 million, although it has more restructuring than analysts can agree on.  It listed the following for subscribers as of last quarter: narrowband at 2.856M and broadband at 1.093M for as total of 3.949M consumer subscribers.  For business customers it listed the following: 30,000 narrowband businesses, 68,000 broadband businesses, and 104,000 web hosting accounts for a total of 202,000 business accounts.  These numbers have shrunk in EVERY SINGLE CATEGORY.  Shares closed down about 1.2% to $6.67 on Wednesday and the stock’s 52-week trading range is $5.90 to $8.36.  Its market cap is $802 million.

On Thursday afternoon we’ll get to see earnings out of United Online Inc. (NASDAQ: UNTD). The estimates from First Call for the internet provider are $0.30 EPS on $127.82 million in revenues, although this one is very thinly followed by analysts and there are discrepancies on estimates beyond this quarter.  Estimates for fiscal 2008 are $1.10 EPS on $508.10 million in revenues.  It appears that analysts still have an average price target of $17.00, although we would again urge caution in trusting our number or anyone else’s on these.  The biggest problem here is that after its failed Classmates.com IPO got pulled, United has lost its mojo.  Unlike most Internet stocks, this actually has a decent dividend $0.20 each quarter. Its communications unit, or the ISP of NetZero and Juno listed that last quarter paying accounts had declined some 134,000 to 2.2 million; and this one is now harder to value directly compared because its content/media revenues were roughly two-thirds of the size of the Communications/ISP unit.  United Online closed up 1.5% at $10.87 on Wednesday, and its 52-week trading range is $9.55 to $17.97.  Its market cap is $735 million.

We have covered both of these in our Special Situation subscriber letter, and both are routinely screened for our weekly "10 Stocks under $10" subscriber letter.  In fact, both of these fit in our "small cap internet watch list" for companies that we think will ultimately either be acquired or will merge up under the right circumstances.  While these businesses are declining, there is actually some value here for the right financial asset buyer.  In a slowing economy it is even possible that a portion of those who prefer the more expensive broadband triple play packages from cable or the telecoms might not have a choice BUT to go back.  That may be heresy to some, but it is possible.

But we’d like to take a walk on Hypothetical Lane here.  If you are Jeff Bewkes at Time Warner inc. (NYSE: TWX) and want divest the rest of the legacy AOL Internet access business, you’d probably be watching these two reports quite closely. The TWX earnings call transcript from Blogging Stocks is here. This will derive an implied market value per subscriber on a discounted basis.  Based upon what you see there you would begin to work these numbers backwards.  How many independent broadband and narrowband ISP’s with large customer bases does the U.S. need with all the Internet access choices out there?  Under the right circumstances and a little creativity you might even be able to imagine a business threesome.

Jon C. Ogg
February 6, 2008

• Affymetric (AFFX) raised to Buy at UBS.
• Citigroup (C) saw its Debt rating cut from Aa2 to Aa3 and financial strength cut from A to B at Moody’s based on capital ratios.
• Disney (DIS) raised to Buy at UBS.
• Drugstore.com (DSCM) started as Buy at Banc of America.
• GSI Commerce (GSIC) cut to Hold at Jefferies.
• Jetblue Airways (JBLU) raised to Peer Perform at Bear Stearns.
• Panera Bread (PNRA) Cut to Neutral at Sun Trust Robinson Humphreys.
• Unilever (UN) started as Buy at Banc of America.
• United Online (UNTD) raised to Buy at Jefferies.
• Credit Suisse makes downgrades in oil patch: Devon (DVN), EOG Resources (EOG), Frontier (FTO), Newfield Exploration (NFX), Quicksilver (KWK).

Jon C. Ogg
December 14, 2007

According to the company, Classmates Media Corporation, intends to withdraw its S-1 registration statement as previously filed with the Securities and Exchange Commission. United Online has determined that proceeding with the initial public offering ("IPO") under current market conditions would not be in the best interests of its stockholders.

United Online expects to record transaction-related costs of approximately $4.5 million to $5.5 million during the fourth quarter ending December 31, 2007 in connection with its decision to withdraw the offering

Douglas A. McIntyre

We did note that United Online was attractive right after the original filing,but shares had just run up too much because investors appeared that theywere hoping for a repeat of the EMC-VMware play book.  Unfortunately, when United Online shares were running up, we noted for our Special Situation Investing Newsletter that we felt United Online shares were pricing in too excessive of a premium because of the upcoming spin-off of Classmates.com.  The implied value will be tracked and commented to by many investors, analysts, and fund managers.  Now that shares are back under $13.00, we do not feel as negatively regarding the United Online valuation. 

Classmates increased its revenue roughly 44% to $140.1 million during the first nine-months of 2007 and posted a profit of $1.7 million instead of a loss of $3.9 million in the first nine-months of 2006.

We have our own open email distribution list covering details of other IPO’s, special situations, spin-off’s, and merger candidates.  The current offering is for 12 million shares in a range of $10.00 to $12.00 per share.

Jon C. Ogg
December 10, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.