Use access key #2 to skip to page content.

gnulaw (54.24)

(Update2) (Geeknet:GKNT) A Geek Tragedy - Q4/FY Ending 12/31/11

Recs

2

February 18, 2012 – Comments (18) | RELATED TICKERS: IACI , GKNT , AMZN

Update1 (NASDAQ:GKNT) A Geek Tragedy - Q4/FY Ending 12/31/11.

Below I highlight GKNTs Valentine's Day conference call. Here are the key takeaways.

Key Takeaways from GKNTs Valentines Day Conference Call:

1. On Valentine's Day 2008 a Hedge Fund Manager and GKNT 13D Shareholder sent a demand letter to the GKNT Board of Directors to unlock value when the stock closed at $1.78 (pre 1:10 reverse split) or $17.80 adjusted. GKNT closed at $16.06 Friday February 17th 2012  as Langone provided millions in compensation for failed executives and initiatives not based on performance.  Since February 14, 2008 (four  years) GKNT non-insider shareholders have unequivocally witnessed only continuing patterns of shareholder value destruction. 

2. No one sounded excited/confident/in control on the call except for Katy. Drobick knows his stuff but didn't sound convinced himself of their strategy possibly due to current management/product structure he does not agree with. Someone is hobbling Drobick imo. Drobick is a superior asset.


3. Langone was conspicuously reserved. He was managed (PC) at this CC viz-a-viz a political candidate. He read (poorly) from a script opening the call vs. generally being all over the place during each preceding CC since his arrival. 

4. Langone never mentioned the employees. Langone would consistently fall all over himself how great the employees are and how much he has learned from them during each quarterly CC since his arrival.

5. Colon Washburn never mentioned GKNTs 433,816 Twitter followers, 252,343 Facebook followers and 53M monthly unique visitors representing GKNT's social media infrastructure, viral marketing campaigns' competitive advantages. He again also completely sounded out of touch with this market...because he is.

6.  There was only one analyst on the call with questions. One.

7. No hard questions were asked, AGAIN.  e.g. What accounted for the dramatic drop in SF downloads and the accordant implications.


8.
What is Jeff Drobick's motivation to stay at GKNT? It was very evident the he sounded as if he knew the Media division and his career were at a dead end. He did not sound like he wanted to be there. 

9. Langone could not believe there were no more questions/analysts on the conference call. He was speechless right around 24:59 into the CC.

10. Langone should have made Jeff Drobick CEO and stepped down last quarter.

11. After Jeff Drobick is made CEO he should be provided carte blanche latitude to restructure GKNT management/Business Units which may include spinning off ThinkGeek and engaging in an IPO while concommitantly putting GKNT into an acquisition bidding war with IACI, AMZN, BBY, et al. The fact Langone has not made this obvious move with Drobick represents yet another smoking gun and confirms Langone has simply failed to create non-insider shareholder value.

 

EBITDA EBITDA EBITDA, THAT'S ALL FOLKS!"

 

GKNT Q4 2011 Ending Dec 31 Conference Call. Total length: 25:17.



1:45 - 3:14 Ken Langone (reading from a script)

3:15 Katy MCarthy (solid presentation/delivery).

3:35 (and 4:52) 2011 (total) rev +26% to $119.5M...driven by 30% growth in Thinkgeek revenue combined with 12% growth in Media (Jeff Drobick) revenue.

5:28 Thinkgeek revenue for the 4th quarter increased 23% to $54.8M.

5:53 Thinkgeek q4 product gross margin 26% vs 27% q4 2011

6:08 Our overall gross margin of 22% was flat with q4 2010. Product gross margin down from26% to 23%. 2011 overall gross margin was 16% vs 18% for 2010.

7:19 2011 Thinkgeek revenue grew 30%...Daily unique visitors grew by 34% to 71.3M.

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.

9:45 Expenses companywide - R&D up 20%.

10:19 We ended the qurter wtih cash and investments of $36.9M.

10:41 Colon Washburn


11:28
National partner with Old Navy.

12:55 Media exposure - q4 - products like iCade/Electronic Guitar Shirt attracts non-traditional business to our site.. iCade featured on the Today show. also appeared in NY Times, CNN, GMA,and USA Today,..

15:51 Jeff Drobick - the media busienss was down 6% q4 primarily because of the drop in traffic...Traffic for the year was down but revenue was up and we delivered profitability for the full year.

16:24
2011 was a year in transition for the Media business...Geeknet Media is the first and global social media destination for B2B technology professional with our community of over 40M active IT decision makers who are developing software, downloading applications, and commenting on technoliogy news...

17:00
We will accelerate traffic through several exciting initiatives. First..SourceForge...we will continue to work on a expanded catalog of open-source projects, a better directory showcasing the best of open-source software, localized offerings, and new content verticals for our community. We have major releases planned for the developer experience on SourceForge.

17:24
And on Slashdot we are investing in mobile and making our core site better.

17:43
Today we are announcing a new marketing services line designed to expand our relationship with our existing lead-generation clients and offer community engagement and high-impact marketing programs. We are uniquely positioned to be the first place in B2B tech you go for integrated high-ROI programs that include demand-generation custom content custom community and research that tech company's are seeking.

18:07
Third, we will deliver new and innovative social advertising products. One example being "Ask Slashdot" that allows our advertisers to transparently engage with our community on specific  high-value topics...Finally we're focused on the global opportunity...2011 grew int'l rev 88% YoY.

19:10
Katy

19:20
Open the line for questions:

19:50-24:34
James Dobson, Benchmark.


24:35
NO FURTHER QUESTIONS


24:59 Ken Langone (a very spent, confused, defeated Ken Langone).

 

18 Comments – Post Your Own

#1) On February 19, 2012 at 8:33 AM, gnulaw (54.24) wrote:

#1. oh, GKNT is still not profitable.

Report this comment
#2) On February 21, 2012 at 6:39 PM, gnulaw (54.24) wrote:

>>7. No hard questions were asked, AGAIN.  e.g. What accounted for the dramatic drop in SF downloads and the accordant implications.

or Why did (NASDAQ:GKNT) Chief Revenue Officer  abruptly resign six days before releasing q4 ending December 31 2011 numbers  ?

Report this comment
#3) On February 22, 2012 at 8:02 PM, gnulaw (54.24) wrote:

Within hours of the above post on February 21, 2012 this SEC FORM 8-K alert was issued by SECFilings

"...On February 9, 2012, Geeknet, Inc. (the "Company") announced that Mr. Matthew Sweeney, Chief Revenue Officer, is leaving the Company.  Effective February 8, 2012, Mr. Sweeney no longer serves as an employee of the Company..."

Source: SECFilings 2/21/2012

Why?

btw GKNT reached a new 52-week low today...

Report this comment
#4) On February 23, 2012 at 5:38 PM, gnulaw (54.24) wrote:

Geeknet Launches Media Marketing Services.

Report this comment
#5) On February 23, 2012 at 6:13 PM, gnulaw (54.24) wrote:

GKNT should be finally be at its turning point to profitability if Drobick figured out how to finally monetize GKNTs rich Media assets ( SourceForge.net , slashdot.org , freecode.com )  with the launch of their Media Marketing Services.

Report this comment
#6) On February 24, 2012 at 7:28 AM, gnulaw (54.24) wrote:

Ken Langone (continues to) put money where his mouth is...acquires more shares on the open market.

Report this comment
#7) On February 25, 2012 at 7:28 AM, gnulaw (54.24) wrote:

and again on Friday (re: above post). Langone sets himself apart from most companies in this respect. And this is a big deal. It is a key Peter Lynch indicator as posted on the most recent update of  PVSW (comment #1).

Report this comment
#8) On March 02, 2012 at 10:31 PM, gnulaw (54.24) wrote:

Langone continues open-market share acquisitions Feb 27 - Mar 1.

Report this comment
#9) On March 16, 2012 at 7:27 PM, gnulaw (54.24) wrote:

James Dobson, The Benchmark Company, Starts Geeknet (GKNT) at BUY .

Report this comment
#10) On March 22, 2012 at 1:56 AM, edenchen (< 20) wrote:

still trying to figure out, do you like this company or not? Seems like you feel that the assets are probably worth more than the company is currently trading at, but the management team has been doing a terrible job at creating any value. You seem to know the situation well - would you be a buyer? 

Report this comment
#11) On March 26, 2012 at 10:26 AM, gnulaw (54.24) wrote:

Q1 ending March 31, 2011:In Perspective

 

GKNT 10-Q For period ended March 31, 2011. GKNT Press Release dtd May 6, 2011.

"...Total revenue for the first quarter of 2011 was $19.9 million compared to $14.7 million of revenue for the first quarter of 2010. Net loss for the first quarter of 2011 was $2.4 million or $0.38 per diluted share compared to net loss of $2.8 million or $0.47 per share, for the same period a year ago. Adjusted EBITDA for the first quarter of 2011 was a loss of $1.1 million, compared to an adjusted EBITDA loss of $1.6 million for the same period a year ago. A reconciliation of net income as reported to adjusted EBITDA is included in this release.

First Quarter Highlights:

ThinkGeek e-commerce revenue increased 46 percent to $15.2 million for the first quarter of 2011, compared to $10.4 million for the first quarter of 2010. Orders shipped increased by 54 percent in the first quarter of 2011 as compared with the same period last year.

Media revenue increased 10 percent to $4.7 million for the first quarter of 2011, compared to $4.3 million for the first quarter of 2010.    

Total cash and investments at the end of first quarter 2011 was $25.6 million..."

My take, all thinkg equal, as of March 26, 2012, GKNT is a Strong Buy as this management team should report profitability this quarter. If GKNT Management misses sentiment would be a Strong Sell with a demand from non-insider shareholders for Langone and his "partners"  to immediately resign and put GKNT in play with IACI, AMZN, BBY... 

Report this comment
#12) On March 27, 2012 at 7:41 AM, gnulaw (54.24) wrote:

>>My take, all thinkg [sic] equal,

Where GKNT is now is precisely why Straddle's were invented. Unfortunately there are no options available on GKNT. If I were Barry Diller (NASDAQ:IACI) I would make a hostile takeover of GKNT and simply put Langone and  "partners"  out of their misery, at this point[1.].

(NASDAQ:AMZN) and (NYSE:BBY) would also be logical suitors and most likely any takeover attempt would precipitate a bidding war. This should be Langone's strategy if there is a miss this quarter which ends this week. 

[1.] See point 1 above in the original post

Key Takeaways from GKNTs Valentines Day Conference Call:

1. On Valentine's Day 2008 a Hedge Fund Manager and GKNT 13D Shareholder sent a demand letter to the GKNT Board of Directors to unlock value when the stock closed at $1.78 (pre 1:10 reverse split) or $17.80 adjusted. GKNT closed at $16.06 Friday February 17th 2012  as Langone provided millions in compensation for failed executives and initiatives not based on performance.  Since February 14, 2008 (four  years) GKNT non-insider shareholders have unequivocally witnessed only continuing patterns of shareholder value destruction. 

Note: GKNT closed at $15.17 March 26th or down 14.8% over a period > 4 years ago (49+ months) whis this demand for shareholder value maximization was made from Trivium Capital Management Hedge Fund to the GKNT Board of Directors.

Report this comment
#13) On March 27, 2012 at 8:28 AM, gnulaw (54.24) wrote:

>>(NASDAQ:AMZN) and (NYSE:BBY) would also be logical suitors and most likely any takeover attempt would precipitate a bidding war. This should be Langone's strategy if there is a miss this quarter which ends this week. 

(NASDAQ:AMZN) and (NYSE:BBY) would also be logical suitors and most likely any takeover attempt would precipitate a bidding war. This should be Langone's (and partners and GKNT insiders, institutional shareholders, and independently Diller's) strategy if there is a miss* this quarter which ends this week. 

* miss = not profitable at the net income level not EBITDA or mathematically,  Net Income > 0 (.)

Report this comment
#14) On March 28, 2012 at 10:22 AM, gnulaw (54.24) wrote:

BREAKING NEWS... @Slashdot Launches SlashdotTV as Dedicated Channel for B2B Technology Video...

 

Slashdot TV

Report this comment
#15) On April 01, 2012 at 7:12 AM, gnulaw (54.24) wrote:

April Fools Fools!

April Fools investing @ (NASDAQ:GKNT)s* ThinkGeek for Annual April Fools Gifts...#Barbie #Minecraft #GameOfThrones #StarTrek #StarWars ,,,

* ooops, wrong way! :(

Report this comment
#16) On May 02, 2012 at 9:47 PM, gnulaw (54.24) wrote:

<<<strong>1. On Valentine's Day 2008 a Hedge Fund Manager and GKNT 13D Shareholder sent a demand letter to the GKNT Board of Directors to unlock value when the stock closed at $1.78 (pre 1:10 reverse split) or $17.80 adjusted. GKNT closed at $16.06 Friday February 17th 2012  as Langone provided millions in compensation for failed executives and initiatives not based on performance.  Since February 14, 2008 (four  years) GKNT non-insider shareholders have unequivocally witnessed only continuing patterns of shareholder value destruction. 

[Update] GKNT closed at $13.34 (May 2, 2012) making another successive 52-week low today, and significantly, down 25.3% from 2/14/2008 when a Wall Street Hedge-Fund Manager demanded Geeknet unlock obvious shareholder value. Wow.

Report this comment
#17) On May 02, 2012 at 9:57 PM, gnulaw (54.24) wrote:

Geeknet reports Q1 ending March 31 numbers tomorrow.

A conference call will be held that day at 11:00am ET / 8:00am PT. Live Dial In Information: Live Dial In (Toll Free): (877) 348-9353 Live Dial In (International): (253) 237-1159

A live audio webcast and replay will be available in the Investor Relations section of the company's corporate website at geek.net/investors. A dial in replay will be available from 2:00pm ET May 3, 2012 to 11:59pm ET May 17, 2012.

Dial In Replay Information: Replay Number (Toll Free): (855) 859-2056 Replay Number (International): (404) 537-3406 Conference ID #: 59211892

Report this comment
#18) On August 20, 2012 at 5:40 PM, gnulaw (54.24) wrote:

>>Key Takeaways from GKNTs Valentines Day Conference Call:  (Feb 18, 2012) 5. Colon Washburn never mentioned GKNTs 433,816 Twitter followers, 252,343 Facebook followers and 53M monthly unique visitors representing GKNT's social media infrastructure, viral marketing campaigns' competitive advantages. He again also completely sounded out of touch with this market...because he is.

Update

(Aug 20 2012Breaking News  Geeknet Announces Planned Departure Of President And CEO Of ThinkGeek, Inc.

qed

 

Report this comment

Featured Broker Partners


Advertisement