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    Monster.com’s Takeover Rumors

    By Stock Charts | May 4, 2007




    Shares of the job recruitment site Monster.com (Nasdaq: MNST) surged yesterday in midday trading as rumors started flying about a possible acquisition. Shares were up 10% on nearly four times the average daily volume, and trading in calls between 45 and 55 strikes was through the roof. Jim Cramer of TheStreet.com said, “The trading smacks of illegal insider information and predicted authorities will look into it.” In addition, Cramer “cited Google (GOOG) and newspaper publisher Gannett (GCI), which jointly owns Monster rival CareerBuilder.com with fellow publishers Tribune (TRB) and McClatchy (MNI) as possible suitors.” On top of that, analysts at Credit Suisse put an “outperform” rating on Monster on May 3, with a target price of $60.

    MNST Stock Chart

    Monster’s stock took a hit in April after a lower than expected earnings announcement. In addition, William Pastore, the president and CEO at the time announced his departure from the company after only 7 months. In his place Sal Iannuzzi, was hired. Iannuzzi was previously the head of Symbol Technologies, a maker of bar code scanners and radio frequency identification (RFID) tags. Much like Monster, Symbol Technologies was dealing with accounting problems when he took the helm in Jan 2006. After only a few months, Iannuzzi was able to negotiate a deal with Motorola for $3.9 billion; almost a 20% premium over Symbol’s market value.

    Possible buyout candidates include Google (GOOG) and Ganett (GCI). Google currently has a classified listings service called Google Base, but it’s nowhere near the popularity of Yahoo’s Hotjobs, Careerbuilder, and Monster.com. Buying out Monster could be a great way for Google to acquire a customer base and solidify their position in the online job listings sector. Ganett, on the other hand, owns Careerbuilder and a buy would be a great way to consolidate the online job listing market, bringing the listings to one central location. This is crucial for a job listings site like Careerbuilder because the a bigger userbase attracts more job listings, which in turn leads to more users, and the cycle perpetuates itself.

    Based upon yesterday’s action, it seems that a bid for Monster is looming in the horizon. Still, this is a highly speculative play and as such the risks are fairly high.

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