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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.

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