TheStreetdotCrushed

TheStreet.com is buzzing with activity. The coffers are full thanks to a capital injection from a crossover VC fund, and they have funneled some of into the launch of Mainstreet.com and ramping up their video efforts.

The stock (TSCM-NASDAQ) has been a dud of late, although to be fair, the market has been tough. Still, the SellSide is not happy, and they are turning negative on the stock today as it flirts with 52-week lows.

Merriman cut numbers today, taking their 2008 revenue, EBITDA and EPS numbers down to $83.3 mln, $21.4 mln and $0.57 from $87.6 mln, $24.6 mln and $0.66. A punk ad market is partially to blame, and fewer people are willing to shell out money for subscriptions due, in part, to a proliferation of blogs.

Jim Cramer's ongoing contract negotiations are a wildcard, and his temporary extension is due to expire in a few weeks. A few key staffers have departed, and employees are grumbling, no doubt disenchanted with their compensation while watching directors peel out of stock. Director Jeffrey Sonnenfeld is doing alright, thank you very much, while the the boards he serves on watch their stocks implode. At least TSCM shareholders have it better than those at Gevity (GHV-NASDAQ) and Lennar (LEN-NYSE). Way to go, Jeff.

But he company is not standing still.  The redesign of TheStreet.com should eventually pay for itself, but management has a long way to go to make Mainstreet.com a winner, despite their optimism:

MainStreet brings us the cohort where money and life intersect.” CEO Tom Clarke also noted that the site has helped the company broaden its demographic, helping its flatten out its heavily male-skewed reader base. “(Eventually) will be a bigger site than TheStreet.”

Sorry guys, the site looks like a dud. At least you can shut it down without taking much of a financial hit.

Stockpickr.com is a winner however, and they finally disclosed the terms of the transaction to buy the company in the recent 10-K filing. Hopefully Altucher let a little stock go at higher prices:

Stockpickr, located at http://www.stockpickr.com, allows its members to compare their portfolios to others in the network, scan portfolios for investment ideas and open a dialogue with like-minded investors in a secure environment. A.R. Partners owned 50.1% and TheStreet.com 49.9% of the venture. On April 25, 2007, the Company announced the acquisition of the remaining 50.1% stake in Stockpickr.com business that it did not already own. The Company paid consideration of $1.5 million in cash and issued 329,567 shares of unregistered shares of the Company’s common stock, having a value on the closing date of approximately $3.5 million. 10-K

We would love to know what his contract hangup is all about. The company has long been rumored to be a buyout candidate, and perhaps the current swoon offers buyers a chance to finally pounce. Unless I am missing something, no one shareholder could block it and they do have about $2.50 a share in cash; the valuation is more reasonable than it has been in nearly 18 months, at 10x EBITDA, although the numbers are moving the wrong way.

Ultimately the stock’s directon will be decided by Cramer’s contract. We spied Cramer schlepping around the Hamptons two weeks ago, possibly looking to upgrade his girlfriend’s relatively spartan accommodations.

Out advice to Jim would be to slow down and live a little this summer. His crushing workload is bound to take a toll.

But we would hate to lose him permanently. Too much fodder for the mill, and he did nail Bear Stearns at $30, no matter what the naysayers think.

Good call, at least on Friday, Jim.

TheStreet.com
10-K Filing
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The content contained represent the opinions of 1440 Wall Street. This commentary in no way constitutes a solicitation of business or investment advice. It is intended solely for the entertainment of the reader, and the author. No Position

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