Ariana Research
Long/short equity, deep value, special situations

Marchex: Another Bubble Basket Stock

Executive Summary

I recommend a SHORT position in Marchex, Inc. (NASDAQ:MCHX) ("Marchex," "MCHX," or the "Company") with a 12-18 month price target of $6 per share (using bullish assumptions) versus its current price of ~$12. This would imply a 50% gain to the short with a reasonable valuation scenario pegs the equity value at ~$3 per share.

This past April, it was mentioned in Greenlight Capital's Q1 letter the arrival of a second tech bubble, for which they implemented a "bubble" basket consisting of expensive tech/momentum stocks. Marchex is a prime example of a company that should belong in such a basket. Although the Company has been in existence for over 10 years, a couple of strategies/businesses

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