In my review yesterday of Share Indices in Nov 11, I said I’ve been an investor in Blinkx since their IPO in May 2007 at 45p. After sinking to 11p, they had then become one of the best performers in the ‘Holway Portfolio’ – reaching a high of 156p at the end of Oct 11. Then, in early Nov., Blinkx bought Prime Visibility Group (See Blinkx expands again), did a placing to raise some funds and, a few days later, came out with some pretty good H1 results (See Blinkx still soaring) Well, 63% revenue growth was pretty good in our books. But, since then the shares have been in free fall – down 50% to 75p in the month. Maybe this is one occasion when I’d genuinely like one of our readers to tell me why?
And you did!
George O’Connor from Panmure Gordon wrote to say “Blinkx talked down growth at its results – this came a few days after the acquisition where trading news suggested that is well (sort of right but way wrong) and raised money (ouch) – folks are not happy – thinking that disclosure should have been better – also with growth coming off a bit on a highly rated ‘growth’ stock folks had other reasons to be upset as well. On the day we were critical that the acquisition was more about SEO functionality than promoted but I don’t think that anyone was especially upset about that.
Shares are in the dog house for a while now”
Another reader, who gave his name but asked to remain anonymous for good reason, said
“The recent activity and results suggest that video search is too hard to monetise (technically brilliant, but maybe people just don’t need it?), and that Blinkx is turning into a more traditional online advertising company – thus deeply cutting the (perceived) potential for exponential growth. Exponential, immediate growth was being assumed while the share price was above 150p, but the results and PVMG acquisition have made people think that Blinkx is just another Internet business – sound, reliable even, but not likely to make us all millions by May next year.”
Thanks to you all. Shame I didn’t sell a month back!