Peter Kafka

Recent Posts by Peter Kafka

Jim Cramer’s Things Were Bad Last Quarter, and They’re Getting Worse

jim-cramerNo surprise that Jim Cramer’s had a crummy fourth quarter: Selling ads or subscriptions for a financial Web site was a tough proposition in the last three months of 2008. But maybe things will get better later on this year, right?

Nope. Advertising was down 21 percent at TheStreet (TSCM) during its last quarter, and the company expects things to get worse. “Early indications suggest that the year-over-year decline in advertising revenue that we saw in the fourth quarter will increase in the first half of the year,” Chief Financial Officer Eric Ashman predicted in the company’s earnings release.

But wait: Unlike other online businesses, TheStreet isn’t completely dependent on advertising–it sells expanded access to its content via subscriptions. Won’t that help? Nope. Ashman: “The pressure on the subscriber base is likely to continue as many investors are no longer market participants, and job reductions in the financial sector reduce the pool of interested consumers.”

The one bit of hopeful news: TheStreet has a nice cash pile–$76 million at latest count–and no debt, and there aren’t many media companies that can say that. But that isn’t impressing investors, who don’t seem to think the company is worth much more than its cash on hand. As of yesterday afternoon, they were valuing the entire operation at a little under $81 million.

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I think the NSA has a job to do and we need the NSA. But as (physicist) Robert Oppenheimer said, “When you see something that is technically sweet, you go ahead and do it and argue about what to do about it only after you’ve had your technical success. That is the way it was with the atomic bomb.”

— Phil Zimmerman, PGP inventor and Silent Circle co-founder, in an interview with Om Malik