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gnulaw (52.43)

(Geeknet:GKNT) A Geek Tragedy...Turnaround?- Q1/FY Ending 03/31/12



May 05, 2012 – Comments (11) | RELATED TICKERS: GKNT.DL , IAC , AMZN


GKNT Q1 2012 ending Mar 31 2012 Numbers and Conference Call


Key Points

Katy 4:44/23:52. Financials.

Financial Overview
6:20 Thinkgeek's product gross margin was 23% v 20% q1 2011. q1 overall gross margin was 15% v 10% q1 2011

7:00 Thinkgeek...the number of daily unique visitors (q1 2012 v q1 2011) grew by 56% to 21.2M

7:53 SourceForge download page views were down 16% at 197M. Our monthly unique visitors were 45.6 million down 8%

8:44 R&D expenses were up 93% (primarily due to investments in GeekLabs and Media engineering)

8:51 We ended the quarter with cash and investments of $32.5M* (actually $38.5M*)

*9:21 One last comment about cash, as we disclosed previously, after the quarter ended (Apr 4)  Geeknet sold its Pfd stock investment in Collabnet to a 3rd party for $6 million. The carrying value at the time of the sale was $2M and therefore a gain of $4M will be recognized as other income in the 2nd q of 2012...Note: gnulaw exclusively followed and broke the news with this PFD stock investment and sale

9:50 Colon...

13:46 Jeff Drobick...16:05 Intel GoParallel program a fullblown website dev by geeknet media on behalf of an exclusive sponsor...Intel

17:19 Open the line for questions...

17:41 James Dobson of Benchmark

20:20 Media Business...excellent question from Dobson to Jeff Drobick on German SourceForge launch, SlashdotTV,  and SlashBI.


1,  GKNT Board and Sr Mgt intentionally downplayed/buried their $6M cash gain and $4M gain to the pending Q2 ending Jun 30 bottom line. Why? Deferring to Q2 to mark GKNTs formal turnaround?

2.  Positive: Margins improving, Media alliances/new products positive. Very strong people associated with Geeknet Media.

3.  Concern - Colon Washburn as CEO of ThinkGeek (maybe  COO) and retaining key ThinkGeek people.**

4.  Langone should promote Drobick to CEO of GKNT (including ThinkGeek) and step down as CEO, at the latest, contemporaneous with Q2 2012 earnings releas, remaining Chairman. Shareholder value will accordingly become fully valued.

5. Concern - SourceForge declining download page views and declining monthly unique visitors.

Closing comment

It appears GKNT Mgt is positioning Q2 ending June 30 2012 with a substantial earnings surprise and or as their stake in the ground that they will be profitable going forward.



1.  May 04, 2012 OpenOffice Moving to Sourceforge By Sean Michael Kerner - From the 'Does Sourceforge Matter Anymore?' files.

2.  Feb 18, 2012 (Update2) (Geeknet:GKNT) A Geek Tragedy - Q4/FY Ending 12/31/11

3.  Q2 2011 ending June 30 numbers (for reference with GKNTs pending Q2 2012 quarter).

**4. John Frazier (@Fraize) 10/1/10 5:52 PM
I adore going back in time, reading GKNT stock watcher's "predictions" and laughing at how totally absurdly wrong they were. © 2010 - 2012 Twitter


11 Comments – Post Your Own

#1) On May 06, 2012 at 4:23 PM, gnulaw (52.43) wrote:

>>7:53 SourceForge download page views were down 16% at 197M. Our monthly unique visitors were 45.6 million down 8%

Note: This [continuing]? decline succeeds Q4 ending Dec 31 numbers:

8:37 Turning to our media (Jeff Drobick) business Revenue for 2011 was $4.9M down 6%. SourceForge download page views were down 18% at 195M v 239M in 2010. 2011 monthly unique visitors were 46.8M up 10%, however q4 2011 monthly unique visitors were 45.1M down 10%. In 2011 Media drove 12% growth in revenue with positive EBITDA while traffic was down. 

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#2) On May 09, 2012 at 8:15 PM, gnulaw (52.43) wrote:

GKNT Annual Shareholder Meeting tomorrow . Stock trading at 52-week lows, down 15.4% from Benchmark BUY and down 24.9%  from where NY Hedge Fund sent a demand letter to GKNT Board demanding to unlock shareholder value 2/14/2008. Appx $40M in cash*, $86M Market Cap, ThinkGeek 500,000 twitter followers and #175 Internet Retailers Top 500 eCommerce sites. $121M Revenues ttm...

Langone has unequivocally turned this company into a cluster****(.) Insider open market share acquisitions at this point should not be recognized as a bullish signal but alleged stock fraud for obvious reasons.


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#3) On May 11, 2012 at 7:21 PM, gnulaw (52.43) wrote:

(May 11, 2012) Note: Two days after previous post.


1.  Geeknet Announces Plans to Conduct Review of Strategic Alternatives for Online Media Business

2.  Technology Sector Wrap.

3.  Forbes - Geeknet May Sell Slashdot, Other Online Media Operations

4.  GKNT In Play - 7:01AM Geeknet announces plans to conduct review of strategic alternatives for online media business (GKNT) 13.16 : Co announced that its Board of Directors has authorized the Company and its advisors to explore strategic alternatives with respect to its online media business, including the SourceForge, Slashdot and Freecode websites. The Company and its advisors will evaluate a range of options to maximize shareholder value, including, but not limited to, a potential sale of the Company's online media business, investing additional capital to expand the online media business, or other possible transactions involving the online media business. (stock halted, to resume trading at 7:30)

5.  SEC Form 8-K Filed

6. Nasdaq stocks posting largest percentage increases



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#4) On May 13, 2012 at 11:21 AM, gnulaw (52.43) wrote:


Money For Nothing...aka Langone Grasso* s GKNT Non-insider Shareholders.

On May 9th, the day before GKNTs annual shareholder meeting, and two days before their announcement to divest the Media division, the following (> $300,000) Options (Table I) were exercised by the Board of Directors at a cost of $0. GKNT filed these SEC Form 4s after the market close on Friday May 11th buried in the aftermath of their divestiture aka their specific performance failure to monetize GKNT Media properties after four years, and significantly, before they were losing monthly unique visitors and downloads (SourceForge) (comment #1 above).

Q: Why did GKNT wait until after market close on Friday?

A: Alleged consistent patterns.


Table I. Option Awards Exercised on May 9th, the day before the Annual Shareholder Meeting, and filed after Market Close Friday May 11.


 1.   Blank Matthew 2,836 $0 13.37 5/9

  2,  HAMPEL SIR RONALD  1,581 + 2,836  13.37 5/9


COUGHLIN THOMAS M  2,836 13.37 5/9

  5.  Riddick Frank A III 3,403 13.37 5/9

  6.  WRIGHT DAVID B  3,403 13.37 5/9

SOLOMON MICHAEL B  (**) 2,836  13.37 5/9 


1. Langone and Partners including Suzanne Present **, Michael Solomon, Gladwyne, et al.

2. Sep 02, 2008 Dealbreaker, Did Ken Langone Set Up Eliot Spitzer?

*3.Oct 18, 2004 Fortune, THE FALL OF THE HOUSE OF GRASSO

** Sep 25, 2008


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#5) On May 14, 2012 at 9:45 PM, gnulaw (52.43) wrote:

CLUSTER F*** Redux (comment #2 above)

Again, after today's closing bell, GKNT files SEC Form 8-K. GKNTs best asset, Jeff Drobick, leaving.


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#6) On May 15, 2012 at 7:03 PM, gnulaw (52.43) wrote:

Benchmark lowers price target on GKNT on the day of (Geeknet:GKNT)s annual shareholder meeting (May 10th) and the day before GKNT announced divestiture plans for Geeknet Media and Jeff Drobick. See comment #2 above.

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#7) On June 06, 2012 at 9:21 PM, gnulaw (52.43) wrote:

Grasso. noun  a psychological affliction where one exhibits catatonic schizophrenic behavior concomitant with neurasthenic overtones. delusionally excessive, rapacious desire, especially for wealth or possessions.

Common symptoms are taking over a microcap Company (under $100 million market cap) and immediately destroying shareholder value driving the company's stock to threaten delisting and then declare an extreme stock-split e.g. 1:10. The patient's behavior would include building a preposterously huge Board of Directors (  >= 10 ), [with the intent to] take control, and consistently issue massive shares options not based on performance to said "partners" and consistently while the Company suffered continuing losses. The megalomania would include announcing putting, at least, part of the company in play * contemporaneous with insiders accumulating shares during said alleged blackout period. 

Verb to langone

Synonyms  Too old to fail, Cuisinart at high speed, Geeknet, SEC Form 4s , Think geek

Antonym OWS.

* (May 11, comment #3) 

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#8) On June 07, 2012 at 3:09 AM, gnulaw (52.43) wrote:

 >>Synonyms  Too old to fail, Cuisinart at high speed, Geeknet, SEC Form 4s , Think geek and Insider ATM

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#9) On June 07, 2012 at 3:09 AM, gnulaw (52.43) wrote:

 >>Synonyms  Too old to fail, Cuisinart at high speed, Geeknet, SEC Form 4s , Think geek and Insider ATM

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#10) On August 02, 2012 at 7:40 PM, gnulaw (52.43) wrote:

Geeknet announced Q2 ending June 30 numbers today. The clusterf--- continues...

Just after Q3 ended Slashdot  (Alexa world ranking 1,775) nemesis Digg (Alexa world ranking 194) announced they sold as an asset sale for $500,000.00 .Wow!  To exacerbate that GKNT announced today "...Media (slashdot, sourceforge...) revenue decreased 8 percent to $5.3 million for the second quarter of 2012, compared to $5.8 million for the second quarter of 2011...". [emphasis added]. GKNT announced May 11, 2012  "...Plans to Conduct Review of Strategic Alternatives for Online Media Business...".

That makes slashdot and SourceForge worth about $1.42. SourceForge was a victim of the same management negligence as slashdot seeing sourceforge simply slashdotted by github.

So...GKNT lost $2.4M from Operations Q2 ending June 30 2012 also citing "...Adjusted EBITDA for the second quarter of 2012 includes a $210,000 charge against inventory related to the voluntary removal of a product from the ThinkGeek site following a Consumer Product Safety Commission complaint against the manufacturer..." Buckyball was one of the lead items Thinkgeek prominently advertised at throughout 2011 into XMAS 2011 and into 2012. Yesterday the press had this to say about Buckyballs. And we know what the Chairman and CEO of GKNT thinks about this Presidency.

Only one thing to say about all this...






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#11) On August 02, 2012 at 7:56 PM, gnulaw (52.43) wrote:


>>Just after [Q2] ended (June 30) (see comment #10)

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