Jupitermedia sold its Clickz and search-related properties, announced earlier today (see our earlier post). CEO Alan Meckler on the rationale of the sale, on his blog: “The simple reason is that Jupitermedia has evolved from being a media company with images into an Image company with media…Over a 25 month period we have spent close to $200 million making the above referenced acquisitions along with dozens of photo library collections. Most of these deals were done with cash. The cash came from our treasury and from bank borrowings. We plan to make more acquisitions and we plan to continue using cash. So how do we get more cash? Simple, we either go to the public market and offer our stock for cash or we sell assets such as the Search Engine trade shows and ClickZ network in order to raise more funds for acquisitions.”
He’s asking shareholders to back his thinking. Based on the share pries today, that doesn’t seem to be the overall sentiment (down 15 percent today).
Also, analysts have some doubts on the strategy doing forward: “The stock’s down mainly because the images business was a little weaker than expected, but we’re still looking for strong growth moving forward,” Joe Maxa, an analyst with the investment firm Dougherty and Co, said. In a research note, Piper Jaffray analyst Aaron M. Kessler confirmed that slower-than-expected growth in the images business was putting pressure on shares.