TSCM Buys Stockpickr.com

May 7, 2007 4:15pm by

Stockpickr

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Some time ago, we mentioned Stockpickr.com. I just noticed that the firm was acquired by TheStreet.com (TSCM) a few weeks ago.

This is very interesting, and for a number of reasons:

1) Stockpickr is the largest social networking site dedicated to investing. It is also, to the best of my knowledge, the first vertical social networking site to be acquired period.

2) More interestingly, it is the first major acquisition done by TheStreet.com.

Henry Blodget (yes that Henry Blodget) made an interesting and perhaps related observation last week. (Note he and Jim Cramer do not seem to be fans of each other) Blodget wrote: "no one is talking about the biggest single risk-factor at any one company since
Martha Stewart Living Omnimedia."

He has a valid point. In the post Martha-in-the-gray-bar-hotel era, any single individual overly identified with a company — be it founder, spokesperson, or main personality raises some risk for investors. 

With the Stocpickr acquisition behind it — and perhaps several others in the future — we may be seeing a process where TheStreet.com is diversifying itself from that risk factor. That not only is good for TSCM’s shareholders, but potentially  good for TheStreet.com, as they diversify themselves from being at risk from the Cramer-gets-hit-by-a-bus fear. It also improves the odds of someone else potentially acquiring TheStreet.com itself.

This is consistent with my prior views on TheStreet.com’s stock in November 2005, and again in February 2006 and April ’06.

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Disclosure: I publish at TheStreet.com, but hold no equity interest or stock in TSCM. (damn you, George!)

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  2. erik commented on May 7

    As if I needed another reason that the top is in, one of my favorite newsletter reports (it’s more like reading Newsweek Magazine vs. institutional research), Richard Russell’s Dow Theory Letters, has done a complete 180 and has turned reluctantly, but completely bullish on the markets. Albeit, it’s not for fundamental reasoning, but steeped in more hyper asset inflation talk.

    I really like Russell, but to see him snap pivot this fast in the face of deteriorating technicals and many market conditions easily explained by either hype (merger mania) or momentum indicates that even the fuzziest bears have been strongly affected by the markets recent herculean strength. I think the contrarians have been contrarianed into believing it’s time to go long, at precisely the wrong time…

  3. John F. commented on May 7

    Do you and Cramer take the bus together, Barry? Is there an implied threat here?

    Risk factors can have positive or negative correlation. If you ever cross paths with a fellow named Patrick Byrne, please make sure he crosses when the light’s green (I have a vested interest). His tenure at Overstock.com makes mincemeat of Blodget’s example.

    ~~~

    BR Not sure I understand what you mean . . .

  4. Winston Munn commented on May 7

    It appears from the massive increase in consumer debt that Joe6 is quickly reaching the limit on his credit card – sure am glad Paulsen tells us that the market increases compensate the average American for the housing decreases.

    All aboard for Fantasyland!

  6. David Merkel commented on May 7

    I am only guessing here, but I think they probably paid more for buying a large part of Weiss Research, now called TSCM Ratings. That said, Stockpickr is the more valuable property in the long run, though I could see value in integrating the two of them, because it would add fundamental and momentum data to Stockpickr.

    Hey, Barry, thanks for the mention on the linkfest!

    David

  8. ManhattanGuy commented on May 8

    Didn’t Kramer pump this Stockpickr site a few weeks ago on his show. This guy deserve to be investigated. Kramer is a shameless p.o.s.

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