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ModusLink Global Solutions, Inc. Message Board

  • sobithongie_2004 sobithongie_2004 Feb 8, 2007 2:02 PM Flag

    Ridiculous

    James Altucher writes in TheStreet.com's Stockpickr,

    <<Perhaps the best hedge fund in the world, Renaissance Technologies, owns shares of CMGI. I believe Renaissance is pursuing a strategy of buying companies with enormous amounts of cash that are profitable. The idea is that these companies will have a hard time going out of business, and will eventually find a business model to drive their shares up.>>
    http://www.thestreet.com/_yahoo/newsanalysis/stockpickr/10337462.html?cm_ven=YAHOO&cm_cat=FREE&cm_ite=NA

    Well, Renaissance's purchases of CMGI certainly don't fit that, not in any way!

    Renaissance Technologies appears to be way, way in the red on their CMGI investment activity, unless of course they have been doing well on the short side, which is always a possibility. Here's the long side the story, which you can dig out from the SEC website 13-HR filings:

    http://sec.gov/cgi-bin/browse-edgar?type=13f-hr&dateb=&owner=include&count=40&action=getcompany&CIK=0001037389

    cal qtr shares held at q/e
    q3 2300
    q4 40278
    00 0 .........sold 80556 due to 2:1 split jan 12, 2000
    q2 246250
    q3 544549
    q4 785493
    01 0
    q2 0
    q3 0
    q4 0
    02 0
    q2 0
    q3 0
    q4 0
    03 0
    q2 0
    q3 0
    q4 0
    04 0
    q2 0
    q3 0
    q4 0
    05 0
    q2 0
    q3 1643400
    q4 1364788
    06 0
    q2 0
    q3 2109750
    q4
    07

    They did really well on the 2000 q1 sale; I estimate their gain was $8.3M. But they took a $16.1M beating with the 2001 q1 sale, leaving them in the red by $7.8M (these are rough estimates). Then they avoided the stock like the plague until the second half of 2005, when they took another loss, approximately $275K. In q3 of 2006 they invested something close to $2M and could have realized a gain near $750K on that sale if they sold in q4...which they will report on within a week or so. If they did that, overall they'd still be down nearly $7.5M gross, excluding any short investment activity on their part, and excluding multiple transactions within any of the quarters which are not reflected on the q/e disclosure.

    The question you really have to ask is why Renaissance didn't invest near CMGI's bottom, when it was evident that they had successfully divested their lossy dot-com stocks, shed their longterm debt, and were narrowing their focus to a solid operating core. This story unfolded with the acquisition of iLogistix, and then Modus Media....Renaissance completely missed the runup to $3 that took place following these acquisitions...unless of course they traded in and out of the stock, and by quarter close held no position. That's always a possibility.

    Vaultus...wow, that one's really case. That's the company that Yasar Arafat invested in, http://quote.bloomberg.com/apps/news?pid=nifea&&sid=ag2fQ5pMZXc8 . Vautus' Alexa traffic rank is 4,841,517 , http://www.alexa.com/data/details/traffic_details?url=vaultus.com , which is just about as close to nothing as you can get with Alexa's traffic rank.

    <<The next day, CMGI invested $5 million in a company I had started called Vaultus (which, fortunately, still exists).>>
    There we have a disclosure of CMGI's initial investment in Vaultus, $5M. According to CMGI's fy2000 10-K, CMGI took a 10% stake in MobileLogic, Inc. (now Vaultus) in March 2000. That was Vautus' initial round, for $25M. This was followed in March 2001 with a Series B $32M round, with six investors including @Ventures, bringing the total to $57M for all investors at that point. They may have received additional funding.

    <<CMGI evolved into an information technology services company.>>
    Pretty far off the mark I'd say! But very curious that a company that in fact does provide "information technology services" is called Modis, http://www.modisit.com/ .

    Speculator's wet dream. lenny is correct.

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