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"In October 2004, the Company engaged Allen & Company LLC to assist the Board of Directors in considering possible strategic alternatives. In light of the Company's recent strong performance, the Board of Directors has decided to discontinue the strategic alternative review process." -- From TheStreet.com's Q4 earnings press release last night.

So TheStreet.com is no longer for sale.
Perhaps TSCM's directors felt that business is now so good (Q4 net revenue up 25% year over year) that there's no need to realize value via a sale. Or perhaps there were simply no takers for the company since it was put up for sale over a year ago, particularly with the stock at its current price.

The question for traders and investors is what this means for the stock:

The positive: TSCM is more leveraged than ever to Jim Cramer. His name is all over the newly designed site, to the point where every stock ticker is followed by a link to "Cramer's Take". Cramer's Mad Money TV program is all the rage, and that could lead to continued increases in page views and subscriptions.

The negative: Three factors could cap the stock here.
(1) Now that the company is no longer for sale, short sellers will be less scared, and irrational expectations of a large sale premium will dissipate.
(2) Insiders want to sell -- look at the sale notice of over a million shares over the next 12 months by Jim Cramer and CEO Tom Clarke.
(3) With the recent run-up in the stock, the Cramer-buzz and the traffic it drives to TheStreet's site are arguably priced in. If TSCM produces 2006 EPS of about $0.30 (the current consensus is $0.27), the stock is trading at a forward P/E of over 25. And the 25% revenue growth rate over the last 12 months was fueled by the growing popularity of Mad Money. Hard to see how growth can continue at that rate in 2006 and 2007.

I'm short TSCM and have been for a while. It's been painful. But I think TSCM will suffer from the explosion of free financial content on the Web. And the company's over-dependence on Jim Cramer makes it an unattractive acquisition candidate. The news that TSCM has finally given up trying to sell itself after a year, that insiders are selling, and that the stock has run-up so much make me consider adding to that short position. The risk with being short the stock here is that the Cramer-effect keeps boosting revenue and profits in the short-term.

TheStreet.com's leverage to Jim Cramer is openly acknowleged by the company. Here's a comment from COO James Lonergan from last night's conference call (full transcript here):

One of the many areas that is helping grow our traffic is that we’ve been successful integrating viewers from Jim Cramer’s Mad Money CNBC Television show and listeners from Jim Cramer’s Real Money radio show onto the TSE platform. This integration has allowed us not only to acquire readers of TSE complementary, also buyers of TSE premium subscription products with little or no acquisition costs. There’s also (inaudible) to expand the Street.com brand to a wider and diverse audience. During the quarter, we integrated components of the Mad Money show such as the Mad Money Recap, the ever popular lightening round and Mad Money performs into the Street.com website. With this wider audience, Mad Money currently has 416,000 combined daily viewers and has a much more diverse investor background. It is provided us with the opportunity to expand investor content leading to additional traffic to our site. (Inaudible) content initiative coming from the expanded audience is the launch of the Street University, a free section of www.Street.com, targeting the less experienced investor, coming from all three channels. With the upcoming move of Jim Cramer’s Money radio show from Buckley Broadcasting to CBS Radio, we expect to fully integrate an even larger audience on to the TSE platform.

What do you think?

Full disclosure: short TSCM at the time of writing.

Source: TheStreet.com's Revenue Grows 25%, But Insiders Sell and Company Gives Up Selling Itself (TSCM)