From: Adam Rifkin (adam@KnowNow.com)
Date: Wed Aug 23 2000 - 14:41:15 PDT
My love affair with CMGi continues. How can you not love a company
whose stock runs up 16% in one day -- that's almost two billion bucks in
market cap, folks -- because of this news:
Two great tastes that taste great together...
Meanwhile, CMGi continues to get slaughtered (as an investment for the
year 2000) by the paper it is written on -- according to Rimpinths' PaperPort:
Still has three and a half months to go in that bet, though, and maybe,
just maybe, sentiment is changing again... we'll see. I certainly don't
see CMGi's CEO David Wetherell sweating; his net worth went up more
today than most of us will see in a lifetime...
> CMGI completes a long dot-bomb
> Cyber-surfers debate the marriage of CMGI and sport
> By Shawn Langlois, CBS.MarketWatch.com
> Last Update: 6:01 PM ET Aug 23, 2000 NewsWatch
> Latest headlines
> SAN FRANCISCO (CBS.MW) -- Ladies and gentleman, David Wetherell and Bob
> Kraft would like to weler to avoid retching at the sound of Network
> Associates Coliseum or 3Com Park, but that's me.
> CMGI, Inc.'s (CMGI: news, msgs) decision to slap down a cool $100
> million in a marketing and technology partnership with the New England
> Patriots sparked quite a buzz across the Web ... oh, and the 16 percent
> stock price pop didn't hurt either.
> The vast majority of Internet piranhas spent Wednesday cheering on their
> favorite Internet incubator as it soared amid the ultra-bullish trading
> session, but there was also a boisterous contingency that shook their
> heads at the concept.
> On Raging Bull, where the discussion is always heated, the unimpressed,
> like Magelsaiah, tried to get their point across: "It's the Patriots!
> How does this create value in a company that doesn't exactly market to
> the general public? So ... what CMGI has here is a big expensive
> advertisement that targets a whole segment of the market which they are
> not equipped to market to, and using a failing football team to promote
> their products. This puppy's going south like a goose in the winter time baby."
> And RMLucas had plenty of doubts himself: "I am pro-CMGI, but given the
> fact CMGI has yet to turn a profit, why would they spend millions for
> naming rights for a field? What benefit could this possibly give to
> shareholders? Are CMGI revenues going to increase because their name is
> on a field? Is their stock price going to go up because football fans
> see their name on a building? Are more companies going to form alliances
> with them because they have naming rights? The answer to all of these is
> a definitive NO'"
> Over in the CBS MarketWatch Community, MCH took a look at the big
> picture: "This corporate image building has been another example of the
> diminution of our sports heritage and cultural identity. Like free
> agency, where players leave for more money, the corporations buy the
> name for a few years in hopes of getting some publicity. Then some other
> corp. buys the name a few years later and the ballpark or arena loses
> more of its identity.
> "Having said that, if a private company pays for the privilege, the
> problem is not with them but with the politicians who are selling the
> name. I can't blame the companies for buying free PR and/or
> advertising. And certainly a team like the SF Giants that has a
> completely privately funded stadium, should have the right to call their
> park whatever they want. But if someone tries to re-name Yankee Stadium
> Merrill Lynch Park or Dot.com stadium, I would have a huge problem.
> "Whether it has any tangible benefits for the companies? Who knows? It's
> like the expression '50 percent of all advertising works but we don't
> know which 50 percent.' It is all just another unfortunate development
> in society."
> But, on a day when the buyers arrived in droves, the bulls owned the
> boards ... and deservedly so.
> BriarHopper led the parade: "DW has just executed one of the greatest
> plays or advertising coups in the age of the Internet. The small price
> paid by CMGI for this deal will be returned many times-fold. The Pats
> probably won't play any better or worse but CMGI will certainly be a winner."
> And Mr. Kotter would have been proud of VinnieBarbarino's technical
> breakdown: "If one looks at the charts, it is clear that CMGI has
> bottomed at $32, and undergone a consolidation at $37.5. This
> consolidation has ridden just below the 20-day moving average
> (DMA). Today the price broke above the 20 DMA, and by reaching $41.00 is
> farther above the 20 DMA than it has been in nearly 3 months.
> "Looking back at past history with CMGI, this type of summer action has
> become predictable. Declines in June with brief relief rallies, then
> further declines in July and early August. Finally, by mid August,
> consolidation begins to occur, then a small rise in late August/early
> September, just before earnings in mid September. Following earnings,
> typically a 25-50 percent rise, then more consolidation until early
> November, when, WHAMMO!! Triple from there in 2 months."
> YipDip also had visions of future glory: "It's a great idea ... very
> cheap cost, high-impact advertising with the ad dollars being offset by
> the Pats getting all their Internet stuff from our companies. Pray the
> Pats get into a Super Bowl in the new CMGI stadium ... spots sell on TV
> for $2.5 million a minute while every time they pan the stadium the
> audience sees CMGI; or every time Pat Summerall welcomes the TV audience
> back from a commercial to CMGI Field'... this DW dude is smart, all we
> need is patience."
> The virtual scrum pushed on throughout the session, but, as is typical
> of the message boards, the bears began to disappear as CMGI gathered
> No doubt the doomsayers will return at some point ... especially if CMGI
> goes back to mirroring the Patriots 1999 performance. But, if
> Wednesday's stock surge was any indication, the Street has high hopes
> for a bullish Foxboro effect.
We are the least well known of the top 10 Internet companies. We have tended to shed light on our subsidiaries. -- David Wetherell in today's press conference
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