What’s Behind IncrediMail’s Rise?
Written by: Aaron Katsman | August 23, 2007
Aaron Katsman
www.IsraelNewsletter.com
Before we get started, on behalf of the entire Israel Newsletter team, I would like to send out a big Mazel Tov (congratulations) to Zack “Facebook” Miller and his wife Melinda, on the birth of a spankin’ new baby boy born yesterday evening. Both mother and baby are doing well, from what I understand. Just a warning, if Zack gets a little cranky in some of his postings we will just attribute it to his lack of sleep!
Yesterday, Smallcap Investor, had an interesting post on IncrediMail (MAIL) and the big spike up in the stock on Tuesday of 17%. Smallcap Investor spoke with executive vice president Jeff Holzmann and he said that he thinks the stock’s surge can be attributed to the company’s robust earnings reported on August 14. “Because we’re a small company, it takes a while for our stock to get on investors’ radar screens,” said Holzmann. “There’s a bit of a lag effect.”
Huh?
Wouldn’t it be better to say that he knows of no reason for the stock move? From the earnings release through this past Monday the stock actually dropped 20%. Then, the theory goes, a week after earnings, suddenly radar screens started flashing that IncrediMail had good earnings and investors pushed up the price.
Sounds a little far fetched.
I have another possibility. A well-known newsletter (which will remain nameless) blasted an email out over this past weekend titled “The Next Google’s In: Israel” and went on to describe a company that sure sounds like IncrediMail without mentioning it by name.
“Our tiny Tel-Aviv company trades on the Nasdaq at around $7 today, down from $10 after the recent sub-prime panic, but up from $4 about a year ago.
The business model is now advertising-driven as well as subscription-based. Ad revenue is growing 7-fold over last year.
In short, our Israeli company makes your Facebook world more personal, more secure, easier to use and more intuitive.
WILL FACEBOOK BUY OUR TEL-AVIV FLEDGLING?
I’d be surprised if they didn’t, but I’d be just as glad if Facebook’s business drove our $7 stock to $100 and simply gave us that 400% profit we all missed out on in Google.”
Sounds like IncrediMail to me. Even more, it sure sounds like Zack’s post of a few weeks ago vis-a-vis Facebook. In fact Zack’s scoop about potential suitors for IncrediMail was picked up by Reuters, who asked the company and the company actually confirmed that they have been approached by many firms.
Way to go Zack! Congrats on the baby and way to go on the IncrediMail scoop.
Disclosure: Author has no position in MAIL as of 8/23/07.
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Aaron Katsman is the lead portfolio manager for the Israel Growth Portfolio and Managing Director of America Israel Investment Associates, LLC. For more information, go to www.israelnewsletter.com or call 1-888-327-6179, or email aaron@profile-financial.com.
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