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Merriman Curhan Ford Downgrades Geeknet (LNUX) to Neutral; Online Media Segment Turnaround Taking Longer Than Expected

November 5, 2009 7:46 AM EST Send to a Friend
Merriman Curhan Ford downgrades Geeknet, Inc. (LNUX) from Buy to Neutral.

Merriman analyst says, "We are downgrading LNUX shares to Neutral due to a lack of visibility into the turnaround of the Online Media segment and increased cash burn, which undermines the “backstop” for the stock (cash and NOLs). Under the new management, the Online Media segment has remained flat for the last three quarters, which considering the macro headwinds is perhaps commendable. However, our visibility remains poor. The company continues to introduce and sell premium ad placements with very high CPMs ($50s) and is refocusing on deeper penetration of its large advertising clients in the technology sector as well as premium brands in some non-endemic verticals, but is deemphasizing mid-level clients that took up resources and did not scale up...E-Commerce segment continues its steady growth. ECommerce revenue increased 11% Y/Y, despite the difficult consumer spending environment, and is projected to actually accelerate its growth in 4Q09 to the12-24% range."

To see more analyst ratings on LNUX Click Here.

SourceForge, Inc. provides Web properties that enable the creation, review, hosting, and distribution of online peer-produced content primarily in the United States. SourceForge recently changed its name to Geeknet.



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