Jim Cramer's TheStreet.com: Things Were Bad Last Quarter, and They’re Getting Worse

No surprise that Jim Cramer’s TheStreet.com (TSCM) had a crummy fourth quarter: Selling ads or subscriptions for a financial Website 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% at TheStreet 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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Comments

[H.J. Huneycutt:]

Analyzing TSCM solely from the perspective of their financials, it would appear to be an incredible bargain right now. It's been battered like a bank stock, yet it doesn't have any of the garbage on its Balance Sheet that a bank would have right now. They have tons of cash on hand and low debt, as the author mentions.

At the same time, I personally believe the Street is a lousy website that frequently provides very poor analysis. I don't like the model at all. I question whether people will continue to be willing to fork over money to the Street for stock advice in the long-term; especially given the track record of Cramer and company.

I don't think Cramer is going to go away and I'm admittedly not a fan of his, but this could still be a good buy if there's reason to believe that the Street can generate substantial revenues again --- I'm just not sure I'd be willing to bet on that. If you forced me to go thumbs-up or thumbs-down on the stock, I'd go thumbs-up, but I'm not totally convinced, either, despite the strong financial position.

Feb 20 10:07 AM

[SouthernBea...:]

The Street is always an interesting Read, but Jim Cramer presents news seems to always be Negative. How about putting some Positive News on occassionally! Weather people believe it or not news dictates trends in the Market. Bad News has moved the Market down. Provide more Positive stories and lets see if you can Help the Market.

Feb 20 11:02 AM

[sglaney:]

There really just hasn't been that much good news recently... so maybe the site is accurate in that respect...


On Feb 20 11:02 AM beach7 wrote:

> The Street is always an interesting Read, but Jim Cramer presents
> news seems to always be Negative. How about putting some Positive
> News on occassionally! Weather people believe it or not news dictates
> trends in the Market. Bad News has moved the Market down. Provide
> more Positive stories and lets see if you can Help the Market.

Feb 20 12:29 PM

[Korby:]

As a content provider, I could do without TheStreet.com. It's just another face in the investment information/advice crowd and on the outside banks of a deep moat surrounding the premier destination, Yahoo! Finance. I could do without ever visiting the website, and many other investors make the same choice.

Regardless, TSCM has built quite a war chest out of a high margin business built simply on ad revenues and content subscriptions like the author says. At a price/book ratio of around .5, for a company made of cash assets and not much else, I'm tempted to invest 50 cents on each dollar the company is worth and let the market take its course. With nearly a 4% dividend yield, I could do worse, like letting my money sit in T-bills.

What concerns me is that the advertising dollars aren't going to recover for some time due to the state of the economy. TSCM has acquired more online properties, but their advertising revenue has actually gone down.

Given all the variables and the fact that this company has NO DEBT, I think it is well suited to ride out the storm and could provide a nice return.

Feb 20 10:23 PM

[donzelion:]

I find Cramer to be fairly fascinating - Wall Street's equivalent to a Britney Spears phenomenon.

""The nine most terrifying words in the English language are: 'I'm from the government and I'm here to help.'" (Ronald Reagan)

"...the blame for today's selloff [belongs] squarely on the shoulders of Treasury Secretary Tim Geithner, who...should be calming the markets, but instead is nowhere to be found. This is what happens...when the government is AWOL." (Jim Cramer, via "The Street")

I suspect many of the people watching Cramer haven't realized that his daily barrage often is a repudiation of their cherished ideals and beliefs about the market. I wonder if they'd continue watching, once they realized that he was coming from a position so diametrically opposed to what they have stated they believe in.

Or maybe many of the Reagan diehards found it easy to be courageous in their 20s and 30s, but now in their 50s/60s, its a lot harder...it's easy to say, "no taxes, no regulation, no interference with the market" when stocks are up - but if the market can't function without Geithner coming in to placate a bunch of babies, then it's not really saying much about faith in capitalism, is it/

Feb 21 03:19 AM

[BlueOkie:]

If you follow Jim Cramer's investment advice, you deserve what you get.

Feb 21 09:10 AM

[Mark Green:]

Jim Cramer produced incredible results during his days of running a hedge fund. I have a friend that did very well some years back with him, but he was a skilled trader back then not a tv personality.
I believe he lost some of his edge since the transition. And I have to admit I was a bigger fan of his a few years ago then now.
Only thing to say in anyones defense is that everyone looks like a genius when the market is going up, I remember in 2000 when my barber was giving advise about buying dell computer! That was the biggest sell sign I had ever gotten, I soon liquidated my majority of holdings and just missed the tech correction for which I was thankful, but back to the subject, everyone is getting hit pretty hard in this environment and there are very few people getting it right, I have taken a few hits on the Casino and Bank stocks and if it wasn't for shorting the broader market would be at a double digit loss for the year.
So Cramer I would say is a bullmarket stock picker, he is not the guy that is going to make you money regardless of market conditions, and I hear all these hedge fund guys tell me that they are just that kind of Fund, yet I don't see many with positive returns for this and last year?
Yet they continue to solicit me, and that is when I know they are desperate, my portfolio is barely 1.5m and they are coming to me???
Must be a lot of money sitting on the sidelines to chase after the smaller stock investors.
I myself am cherry picking some financials, AXP, GE, and a few foreclosure real estate deals in Vegas, Detroit, Phoenix, and Miami, good luck to everyone out there, as I hope to see a bottom by summer.
Mark Green

Feb 21 02:40 PM

[Barb:]

An encouraging word from our president could move the markets in a positive way. We hear nothing but doom and gloom from him.

On Feb 21 03:19 AM donzelion wrote:

> I find Cramer to be fairly fascinating - Wall Street's equivalent
> to a Britney Spears phenomenon.
>
> ""The nine most terrifying words in the English language are: 'I'm
> from the government and I'm here to help.'" (Ronald Reagan)
>
> "...the blame for today's selloff [belongs] squarely on the shoulders
> of Treasury Secretary Tim Geithner, who...should be calming the markets,
> but instead is nowhere to be found. This is what happens...when the
> government is AWOL." (Jim Cramer, via "The Street")
>
> I suspect many of the people watching Cramer haven't realized that
> his daily barrage often is a repudiation of their cherished ideals
> and beliefs about the market. I wonder if they'd continue watching,
> once they realized that he was coming from a position so diametrically
> opposed to what they have stated they believe in.
>
> Or maybe many of the Reagan diehards found it easy to be courageous
> in their 20s and 30s, but now in their 50s/60s, its a lot harder...it's
> easy to say, "no taxes, no regulation, no interference with the market"
> when stocks are up - but if the market can't function without Geithner
> coming in to placate a bunch of babies, then it's not really saying
> much about faith in capitalism, is it/

Feb 21 03:40 PM

[donzelion:]

Barb - that's sort of the problem: misplaced expectations. Even if Obama wanted to be another FDR, no fireside chats or lovely quips will clean up a recession. One must simply slog through it, and before slogging away, taking stock of where we are and which way we ought to go is prudent.

One of the great problems of the last 30 years is a general sort of hero worship (Reagan, Clinton, Greenspan, Buffett, and most of all among investors, CEOs in general). Seeking out heroes to lead us (or shepherd our investments) is foolhardy - instead of holding people accountable, we look in vain for that philosopher sophist king who not only sees all truly, but speaks well of all he sees.

Barb wrote:

> An encouraging word from our president could move the markets in
> a positive way. We hear nothing but doom and gloom from him.

Feb 22 10:58 AM