The stock of direct-marketer turned Internet venture investor firm CMG Information Services (NASDAQ:CMGI) soared today, up 20% to a new all-time high of $91.75 per share on no news.
But we suspect that institutional buying of this “public venture capital” outfit may be fueling the rise.
At $973 million market capitalization CMGI may look frothy at first glance
given its $17.8 million latest quarter revenue. But we’ve said for more
than two years now that CMG’s off-balance sheet assets haven’t fully been
valued in the stock in our opinion. Consider CMG owns 42% of Lycos
(NASDAQ:LCOS). That’s $427.98 million right there.
CMG also owns a third of privately-held but IPO-ready GeoCities. We estimate that could be worth $125 million pre-IPO, and more later.
There’s another dozen firms not yet counted here. While not all are of the Lycos or GeoCites caliber, they could be. So between 42% of Lycos and one-third of Geocities, CMG holds about $553 million value off balance sheet.
That leaves CMG proper, its direct mail side, and the dozen or so other Internet ventures it has invested in to make up for the remaining $420 million here? One more hit along the lines of GeoCities and that could be $400 million alone.
Three years ago, when we first went through this exercise with CMG, nobody
believed us, or better yet, nobody cared about CMG. Now Intel and Microsoft
both own about 5% of CMG and it has a portfolio of Internet firms rolling
down the IPO or deal pipeline.
Tomorrow in Internet Stock Report we’ll delve inside CMG further.