Subprime Mess Will Affect Bankrate

Bankrate (RATE) has not pulled back much considering how mortgage companies have rolled over.

A huge chunk of Bankrate's business comes from mortgage companies who were willing to pay up huge for online referrals. With so many of these guys struggling, RATE will lose much of its pricing power and this will hit their earnings in the current quarter. I recommend shorting RATE for the short term despite the possibility of rate cuts later this year.

Comments

[omooc]

If my memory serves, I think I read an article on RATE 2 or 3 weeks ago in Barron's. I thought the article made good sense. It remains so, as evidenced by this post. omooc