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META Group, Inc. (METG) Message Board

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  • itsahorserace itsahorserace Sep 2, 2004 2:27 AM Flag

    METG Possibly Going Private?

    Why would Meta do this?

    They are only beginning to get close to consistent profitability.

    There seems to be a falling demand for industry analysts, so they are in a declining market.

    According to their quarterly results, only the consulting is growing, but there doesnt seem to be much enthusiasm for their consultancy business in their statements of direction.

    Given a cautious market these days, they're not going to make a ton of money taking a re-invigorated company back public again.

    Kutnik is mid 50s, and has been there done that as far as running the company is concerned.

    Is this about building a successful company?

    Or is it mainly about preserving life styles for the existing research employees?

    Just curious.

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    • Not sure what you are basing your statement about 'falling demand for industry analysts'on. Seems that companies need analysts just as much as they ever did.
      Maybe you work for a company that's perfect and don't need to be compliant with anything, have 100% market share & execute flawlessly on delivering product while maintaining profitability. Let me know where you work - I'll send my resume right over!

      re:Dale running a company - why not? He grew META to great heights in the past. The economy & a crappy CFO screwed the company up (let's not forget the BoD approving some crazy budgets too). I have a feeling he sees something great headed in a different direction than it was orignially planned for it to go, and he wants to step in and correct the course. I have a feeling if you ask anyone working there now, the majority would agree that Dale coming back would be welcome.

    • I agree that going private raises several questions on motivation. If Kutnik believes META can become marginally profitable on a sustained basis, then going private to achieve this makes sense. Gartner (IT) with a 3% ROE sells at 1.8+ times revenues. META sells at 0.4 to 0.5 times revenues. META has very little/no street following at this point. With the right financial management and some acquisitions to get scale, it looks like an interesting financial play. in any case, I would suggest META is a steal if it can stay profitable and it sells for anything less than .7 to .8 X revenues or $7.50 to $8.00 per share.


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