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

Join Seeking Alpha PRO to read this archived article and 11,574 other archived articles
IDEA GENERATORXExclusive access to 10 PRO ideas every day
INVESTING IDEAS LIBRARYXExclusive access to PRO library of more than 15,000 ideas
SECTOR EXPERT NETWORKXExclusive access to all sector experts for direct consultation
PERFORMANCE TRACKINGXTrack performance of all PRO stock ideas
PROFESSIONAL TOOLSXProfessional Idea Filters to zero-in based on industry, market cap and more
"In just the first month of using PRO, I used it to generate two ideas which were actionable for me. As a result of these two positions, I have earned more than 20 times the annual subscription costs for PRO."Michael Yagemann, Greenbridge Capital
"I am pleasantly surprised with the scope of small and mid-cap coverage PRO offers. You can't find that any where else."Patrick Rice, Mainstay Capital Management
You may cancel at any time for any reason, and receive a prompt refund for membership on months paid and not used (max. 6 months). Details