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December 12, 2006

I Called It! Mamma.com Inc. Up 80%

posted by MR WAVETHEORY at 12/12/2006 04:47:00 PM
A few months ago, I wrote that Mamma.com Inc. (Nasdaq MAMA) is potentially worth $5.25 when it was trading at $1.59 and and today Mamma.com delivered. Mamma Inc. gained 80% to close at 4.28 (+1.91) on the announcement of its video search engine. That's a sweet gain of 130% for those who bought the stock at $1.59 back in October.

The CEO was effusive in the press release about the video search engine, "Mamma users are now able to find, explore, and view millions of broadband videos from a wide range of topics including TV shows, movies, music, and news events." In a rare case of reaching out to the masses, he even left his contact information in the press release.
Mamma.com Inc.
Guy Faure, President and Chief Executive Officer
Telephone Toll Free: 877-289-4682 #146
Telephone Local: 514-908-4346
My original analysis was very simple:
Note my analysis is very top down. I think these are the scenarios.

25% @ $8 Buyout from Microsoft
50% @ $5 Improvement in earnings and revenues from AOL
25% @ $3 Stand alone company

I think this Mamma.com stock is worth $5.25.

I still think it holds true that this could be potentially an $8 stock. Hard to believe but Mamma used to be a $15 stock.

One note of caution for buyers is that this particular stock is tightly controlled by day traders and market makers. You can see from the chart how choppy it has been.

Judging from the action, it easily moves 20-30% per week - up and down!

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