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Why A Suitor May Click On TheStreet.com


By Gene G. Marcial An anemic performer, TheStreet.com (TSCM), has perked up lately. The stock rose from 3.42 in early November to 4.06 on Nov. 17. (It hit 60 in May, 1999.) Behind the uptick now: takeover talk. Dow Jones is buying MarketWatch (MKTW), outbidding Yahoo! (YHOO), Viacom (VIA), and The New York Times. A New York investor with a big stake in TheStreet.com says: "People are knocking on its door." He says shares are worth twice their current price, if valued at the 6.5 price-to-sales ratio in the MarketWatch deal. Frank Gristina of Avondale Partners says any of the three who lost out may go after TheStreet.com.

Co-founded by TV commentator and investment pro James Cramer, who owns 15.5%, The Street.com provides financial info over the Net. Its income comes mainly from ads and subscriptions. The company has yet to make money. CEO Thomas Clarke Jr., who owns 13.5%, "would not be opposed to selling at the right price," says Gristina, who rates the stock "outperform." In 2005, Gristina sees TheStreet. com earning 18 cents a share on revenues of $40.1 million, up from an estimated $35 million in 2004, and $26 million in 2003. Clarke didn't return a phone call. Catherine Mathis of the Times declined comment, as did spokesmen for Viacom and Yahoo.

Note: Unless otherwise noted, neither the sources cited in Inside Wall Street nor their firms hold positions in the stocks under discussion. Similarly, they have no investment banking or other financial relationships with them.

See Gene on Fridays at 1:20 p.m. EST on CNNfn's The Money Gang.


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