Posts for Ticker ‘WWWW’

Top Analyst Upgrades (BLK, KMX, CTL, INET, LOW, STX, LUV, WWWW)

These are the top pre-market early bird analyst upgrades and positive research calls seen from Wall Street early this Wednesday morning:

Blackrock (BLK) upgraded to Buy at Deutsche Bank.
CarMax (KMX) upgraded to Neutral at Goldman Sachs.
CenturyTel (CTL) upgraded to Overweight at Morgan Stanley.
Internet Brands (INET) Started as Buy at Canaccord.
Lowe’s (LOW) upgraded to Outperform at FBR.
Seagate (STX) upgraded to Buy at Deutsche Bank; upgraded to Overweight at Thomas Weisel.
Soutwest Air (LUV) Raised to Buy at Argus.
Web.com (WWWW) upgraded to Outperform at FBR Capital.

JON C. OGG

Posted on: September 23, 2009 – 8:06 am in Analyst Calls, , , , , , , ,

Web.Com, Perhaps The Cheapest Internet Stock (WWWW, VRSN)

Web_com_logoThis weekend we gave many updates to our favorite stocks in the under $10 category.  Of our stocks, Web.com (NASDAQ: WWWW) remains perhaps the cheapest of the internet stocks which fit within our screening criteria.  Web.com is the old Website Pros, Inc. which traded under the "WSPI" ticker, and this stock has been poorly treated by the current market. 

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Posted on: September 30, 2008 – 1:04 pm in Internet, Value Investing, ,

Top Pre-Market Analyst Downgrades (ADLR, MDRX, CRDN, CAG, IFF, MFE, TWX, VRTX, VOD, WWWW)

These are some of the top analyst downgrades and negative calls we are seeing this Wednesday morning:

  • Adolor (ADLR) Cut to Neutral at Piper Jaffray.
  • Allscripts (MDRX) Cut to Neutral at Piper Jaffray.
  • Ceradyne (CRDN) Cut to Underperform at Wachovia.
  • ConAgra (CAG) Cut to Neutral at JPMorgan.
  • International Flavors (IFF) Started as Underweight at Lehman.
  • McAfee (MFE) Cut to Underperform at FBR.
  • Time Warner Inc. (TWX) Cut to Market Perform at Bernstein.
  • Vertex (VRTX) Cut to Perform at Oppenheimer.
  • Vodafone plc (VOD) Cut to Neutral at Credit Suisse.
  • Web.com (WWWW) Cut to Market Perform at FBR.

Jon C. Ogg
September 3, 2008

Posted on: September 3, 2008 – 7:06 am in Analyst Calls, , , , , , , , , ,

Despite Upgrade, VeriSign Problems May Only Be Starting (VRSN, WWWW, ENTU)

VeriSign inc. (NASDAQ: VRSN) has had more than a tough week.  Shares are seeing a winning day so far as it was upgraded this morning over at R.W.Baird to an Outperform rating.  While we did expect someone to upgrade the stock based upon price/valuation, we are genuinely concerned here that VeriSign’s problems may still have more life in the legs. 

Just two weeks ago, we issued a SPECIAL SITUATION alert to our newsletter subscribers with a short sell or put option strategy based upon many current and recent concerns we have.  We sent out an alert on Monday night asking for holders to cover HALF of the position.  This gain on Tuesday morning would have been approximately 20% on the stock, but the options trade (DEC08 $32.50 PUTS) would have generated more than a 100% gain.  You can see the actual report sample document here now that this is off of embargo.

Right before the long weekend, the company announced that its CEO was vacating the top spot. While that was the catalyst that prompted our profitable call to bet against it, that is likely the second shoe to drop among many.  Yes, the second.  The first shoe to drop was the April resignation of its CFO and of its Controller simultaneously.  Sorry, but that is more than a flag and cannot just be a coincidence.

So what else is there to not believing the current value of this stock?  Competitors such as Website Pros (NASDAQ: WWWW) (or Web.com), Entrust (NASDAQ: ENTU), Register.com, GoDaddy, 1and1, and others offer far cheaper services, and while we argue that VeriSign is the Rolls Royce of the web we believe that the small business migration growth from the waves of "accidental entrepreneurs" will have to seek lower priced services at shops that offer turnkey solutions.  There is some political risk here after 2009 depending on the US Presidential election, and there are many new domain extensions coming online. 

We also believe that its divesting strategy is taking far too long and is going to generate far less than was initially spent on some of these businesses.  Another isue is teh share buyback, which we believe Wall Street gave the benefit of the doubt over on the entire amount and then some all up front without considering the risks.  The company’s recent expansions may also not pan out for VeriSign as quickly as it hopes.

Lastly, we believe that this last departure puts the bias for a real miss to earnings as a very likely scenario.  That is pure speculation though, as the company didn’t change its May guidance recently on the CEO departure.  We also believe that its operating costs are going to grow, and we also believe that it will have a hard time passing down additional price hikes for domain registration.

There are many risks to staying negative after such a sharp and fast drop.  Butthat is why we believe that only a half position should be maintained in a bet against the company. We have continued to favor Website Pros, Inc. (NASDAQ: WWWW) for our "10 Stocks Under $10" newsletter and just issued a new alert on that one this last weekend.

Risks in staying negative in VeriSign here revolve around the company suddenly selling units that have been on the block, accelerated share repurchases, accelerated and above expectations new orders and expanded orders from key customers, domain growth, and more.

Jon C. Ogg
July 9, 2008

Posted on: July 9, 2008 – 2:30 pm in Internet, , ,

Web.Com Buyout: Right Move, 2-Years Late (WWWW, WSPI)

Stock Tickers: WWWW, WSPI, GOOG, YHOO, EBAY, VRSN, AMZN

Web.com (WWWW-NASDAQ) last night finally made the right move, although they are doing it late and possibly with the wrong partner.  The company has signed an agreement to merge with Website Pros (WSPI-NASDAQ).  This is not at all meant to be negative against Website Pros at all.  More than two years ago I had noticed what was going on in the web hosting, domain registrations, e-commerce, video, blogging and the intro of an ‘ease of advertising’ were all starting to converge in a much faster manner than ever seen.  It was as if the goals of Internet-1999 were suddenly converging into a visible effort that had a lot of growth.

Register.com had either been given an offer or was rumored to be on the blocks, but the basis was the buyout of DoubleClick by Hellman & Friedman for starters.  Register.com was larger and tad a cheaper, but Web.com (then as Interland under the "INLD" ticker) was the obvious land grab.  Here we are two years later and the company is going for what is less money than it was potentially worth then.  As noted this is nothing against Website Pros, and as it hasn’t ever gotten this much coverage in the 20-ish months since its IPO this near-5% drop today is probably a gift for that company.

Web.com/Interland was name that at any time Google (GOOG-NASDAQ) could have acquired to ramp up its Blogspot, Google Checkout, Google Base, and the like.  Yahoo! (YHOO-NASDAQ) could have rolled it into its business services, 360, and more.  eBay (EBAY-NASDAQ) could have rolled it up for hosting, think e-commerce, Skype, automatic-buy and auto-auction links and the like.  VeriSign (VRSN-NASDAQ) could have rolled it up into the Network Solutions unit and even Amazon.com (AMZN-NASDAQ) could have used it for part of its e-commerce gateway and sales platform.  GoDaddy.com or a Register.com could have easily absorbed it, as could have Hellman & Friedman or others.  None of that matters now, and this is so small now that it probably won’t make much on headlines.

This was the sort of BAIT SHOP target we had looked for and the stock was under $2.00 at the time.  These are getting harder and harder to find, although we still have targets that are incrementally valuable such as this.  I had taked to a couple of San Francisco-based hedge funds about taking stakes in June 2006, and their thoughts were both that it was too small to matter.  We have several other smaller companies like this now that would be great incremental add-ons for much larger players, although they are micro-cap web stocks and eitherhave no stock options available for hedging or are too expensive to hedge.  Our buyouts and mergers newsletter 24/7 Wall St. "Special Situation Investing Newsletter" covers these, although these are probably worth revisiting in light of today’s reaction to the merger.   

This new company will have to the tune of 234,000 paid subscribers and more than $117 million in annualized revenues.  Unfortunately, Web.com has been seeing a steady drop-off and the value is not what it was.  This is one that I had removed from the BAIT SHOP last year as it became more expensive than what it looked worth and after it had exceeded the $5.50 mark. 

HERE ARE THE BUYOUT TERMS (unanimously approved by both boards of directors): Web.com shareholders may elect to receive for every Web.com share either 0.6875 shares of Website Pros stock or $6.5233 in cash, subject to proration so that the total cash paid shall equal $25 million. In the aggregate, Website Pros will issue approximately 9 million shares of Website Pros stock and pay $25 million in cash. Based on the closing price of Website Pros’ stock on June 26, 2007, the transaction is valued at an aggregate purchase price of approximately $129 million.

Jon C. Ogg
June 27, 2007

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

Posted on: June 27, 2007 – 3:06 pm in Bait Shop, Internet, Mergers and Buy Outs, , , , , , ,