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Tuesday, January 25, 2005

Don't's new IPO

The great wall street bilking machine is in full effect now. Remember Sure you do, they were one of the internet B2C poster boys back in the late 90's. The went public for $182MM, lost a lot of money buy selling products below cost and then went private for $23MM. Bad deal for investors and I'm sure they have learned their lesson. Right?
Well if you didn't get enough of being bent over a barrel, they're back! That's right, is planning on going public - again! Never mind that professional investors are still questioning's valuation. Ignore the fact that being an internet retailer is a lot like -- get this -- being a bricks and mortar retailer. And please, please, please ignore the fact that has lost almost $40MM over the last couple of years.
If you can see through to the 'real, the please, by all means, buy away.

Monday, January 24, 2005

Ouch-o-Desk! Autodesk (ADSK) cracks...

Lots of crackin' going on these days in the tech market. I decided to comment on Autodesk today because they're supposed to be one of the boring tech stocks. These guys make 3D graphing software for kriminy's sake! But, today an analyst came out and refuted the marketing numbers. What are 'marketing numbers', you ask? Marketing numbers are the cheesy statistics that companies put on their press releases and marketing paraphenalia that are always artificially inflated. It's most commonly found in the 'About' section at the bottom of the press releases. When a company says they have 450 enterprise customers with 600,000 users, you can bet that it's more like 228 with 321,000. Why is this so commonplace? Well, first of all these numbers are usually generated by marketing departments -- business units not generally known for adherence to the truth and a bias towards the positive. Hey, it's their job! Considering that there aren't any CPA's or GAAP for marketing literature, these numbers are always wildly optimistic. I can't think of a company getting busted for inflating customer numbers.
Until now. Unfortunately, some companies begin to believe their own marketing and use the numbers when they're on the line during analyst calls. This is when it gets sticky because often analysts will keep track of the numbers in an attempt to gauge fundamental growth of the company. If possible, it makes sense to obtain other metrics from these numbers as well (Revenue per Customer). So, maybe this was a case where the company got a little enthusiastic and paraded the marketing numbers in front of the numbers guys. Tsk, tsk, everyone knows you don't put the marketing literature in front of the accounting department. Accountants actually count things (theoretically at least, unless you're engaged in company-wide fraud, which isn't that far-fetched) and they often can smell a rat (when properly incentivized).

Thursday, January 20, 2005

Forget Ebay: What's going on with Macromedia?

Macromedia turns in a steller performance today on the back of a great quarter. The stock is finally starting to move as its Flash Lite gains some traction and investors are starting to notice their strategy of being more than a pretty face on the Internet. Macromedia has been threatening to get into application development for some time now and new investors are starting to notice -- hence the 20% lift today. (Hmm...maybe ebay sellers redeploying capital?)
I'm not sure I like the stock from a valuation perspective, but I know it will hold the momentum buyers' attention for a while longer. The risk with this stock is that it is tied to the fortunes of the web development community, which is a very cyclical lot. Oh sure, web development firms are cranking away right now, but if the economy hits a speed bump, all of your ultra-cool latte drinking apple iMac totin' friends are the first to get cut. These are Macromedia's buyers. But, I digress, there is certainly no problems on the horizon for that crowd now.
Buy away.

Wednesday, January 19, 2005

Ebay Cracks!

I've been waiting for this one for quite some time. Not because I don't think Ebay is a quality company in a great market, because I do believe those things. Rather, I've always wondered when the Street's expectations would get a head of Ebay. I'm amazed at the magnitude of the after-hours price drop. That's what happens when a market gets heady; when a high-flyer cracks, it drops big-time.
I had forgotten about Krispy Kreme until I read that they replaced the CEO with a turn-around expert. Smart move. Turnaround firms like Zolfo Cooper and Alvarez and Marsal are very good at what they do and will eventually save substantial value for a firm like Krispy Kreme.

Tuesday, January 18, 2005

Interesting comparison: AAPL v. YHOO

So, Yahoo! is the hot one, right? Maybe, but I would argue that Apple's $300MM net income quarter beats Yahoo!s $187 (adjusted to take out investment gains (can you say Google shares?)) quarterly profit. Two consumer tech titans just report solid numbers. Very interesting stories on a go-forward basis as well:
- AAPL: can iPod madness continue from here? maybe, don't count out the Motorola mobile-phone announcement. will the mac-mini be a hit or cannibalize users? this is the $64MM question. I think Apple's gets it on like Donkey Kong from here - the analysts are underestimating the shuffle and mini-mac just like the iPod. maybe someday I'll do a full analysis about this.
- YHOO: can they become a media channel in an immature medium (broadband)? can they do it without physical assets (cable, phone, etc...)? will their SBC and Verizon partnerships be enough? the stock may be in for a pause here.
I think both stocks have a pause as they transition into the next phase of their strategy and the market remains skeptical.
Regardless, it'll be fun to watch!

Monday, January 17, 2005

PeopleSoft lay-offs 'hystericalized'

Lots of articles about the 5,000 PeopleSoft lay-offs lately. Like its a bad thing. 5K is less than 10% of PeopleSoft's work force. It's no big deal, but I just hate the way that the media sensationalizes non-sensational things. The media is really, really stupid. I try to minimize my exposure to it while doing my research. Focusing on facts and ignorning media hysteria has made me a lot of money.

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