Wow. I just took a strong position and within a week lost over half my value. Gee whiz. Wish I'd have held my cash a few days longer. Guess I'm in for the long pull now. Need 225% gain just to get back even....Wow....worst day I've ever had. EVER
... since the EBITDA we will loose from Allstate will be offset by improving EBITDA from other clients (the EBITDA and Operating income from call driven segment were confirmed at $14M and $10M respectively) . This means that call driven revenue should increase $35-37M and segment income by $4M vs 2013. If we sum also Archeo results , the 2014 revenue should be around $190M (25% ca increase vs last year) and operating profit ca $18.5M (or ca 20% more than last year). Same period last year the stock was trading around $8. So I believe that this 50% drop is completely unjustified. Once market manipulation is over and rationalality comes back, PPS should progressively increase again back to $8. From a business perspective, in fact not agreeing to a fixed fee model should be perceived as a positive move by the company to preserve our profitable business model. If Allstate does not want to do business this way, then let it be. Growth and margins will come from other clients
Sentiment: Strong Buy
It lost only 7 cents, which isn't much, especially considering margin calls. It was a good sign that it didn't break through the low price from yesterday of 3.92. It looks like it was manipulated to stay close to 4.00 most of the day, maybe for options expiration. Hopefully, it will move up on Monday.
Yes, six months.
I think you are right that Allstate thought they could squeeze MCHX but what they proposed was a non starter and MCHX was correct to reject it. MCHX always thought they would then try to renegotiate the existing deal which MCHX was open to discuss but that never happened. There appears to be some financial incentive to the procurement group at Allstate to cancel the contract. MCHX was blind sided. the question is why were they blind. If I had a 33% customer, I would make sure I knew the CEO, his wife, his kids and his pets names. MCHX didn't have the internal relationships to fight the decision and they have paid dearly for it..
I'm not sure about Allstate – perhaps they felt as if they were spending enough to believe that they could squeeze more out of the relationship and the margins no longer made sense for MCHX. I suspect/hear the sales pipeline looks promising enough to be able to say no to Allstate's demands – good in the long run, tough decision for MCHX near term if that was the case.
Regarding buyback – I think they have to wait at least six-months, correct?
My guess would be a stock buyback when they are able under SEC rules.
I am still trying to find out what exactly happened with Allstate. I am hearing different things. The market isn't taking the time to figure it out. They are just dumping.
We won't see that big of a reversal in the short-term but it WILL recover in the long term. I believe All-state is just playing Big Business games against a small company in Marchex. All-state wanted lower prices and knew they were a major customer. They threatened to leave Marchex knowing it would crush their stock price but luckily management held strong and stood their ground. If management would have given in to All-state, they would have had to fold to all of their other big customers as well. All it will take is Marchex to sign another big customer for the stock price to shoot back up.
Also worth noting, Management sold a large portion of their shares a few months ago. I believe this was to decrease All-state's leverage against management personally. In short, yesterday was a huge over reaction to a Big Business trying to be a bully. If this company produces the way they report they do, other big fish will get on the line in the near future.
Sentiment: Strong Buy
quad witching and Alibaba have NOTHING to do with Mchx pps. SEC triggers are alerted with high % decliners, trading is looked at, prior PR, LITIGATION, its all coming down the pike. 3.50 LONG before 5.00!
I am sure they are not happy with the stock performance either, and will do what they can to improve the stock price. Today is quad witching expiration with its manipulations as well as Alibaba sucking up billions from other stocks. No doubt MCHX will be above $5 next week again.
-TheStreet Ratings team rates MARCHEX INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
- MCHX was not dumped by Allstate, they dumped Allstate:
Marchex said Allstate sought to switch its business with Marchex to a fixed-fee basis from payments made for each call. "It's not in our best long-term interest to to work under such an arrangement," Marchex said.
- Allstate deal is not too big a deal.:
The company forecast 2014 call-driven revenue of $170 million to $172 million, down from its expectation last month of $178 million.
Call-driven revenue accounted for 89 percent of the company's 2013 $155.6 million top line.
But the company cited "progress" with other large customers and boosted its third-quarter forecast of call-driven revenue to between $47.5 million and $48.5 million, from $46 million last month.
"Beyond Allstate, we continue to experience growth in our customer base," Chief Executive Russell Horowitz said.
With MCHK at an RSI of 10.1? hmmmmm, not very long when they get their faces ripped off from the rhum baba hype....
Sentiment: Strong Buy