Right Thinking From The Left Coast
Chance favors the prepared mind - Louis Pasteur

Monday, February 07, 2011

AOL management pisses away another large stack of cash.

This time the idiots are paying something around $315 million for Huffington Post of all things. Air America here we come!

WASHINGTON/NEW YORK (Reuters) – AOL Inc will buy Arianna Huffington’s influential website for $315 million, looking to the high-profile liberal pundit to rescue it from the dustbin of Internet history. The move, announced Monday, comes at a hefty premium. AOL is estimated to be paying 32 times earnings before interest, taxes, depreciation and amortization for The Huffington Post, said Benchmark Co analyst Clayton Moran.

Similar content deals, such as Hellman & Friedman’s acquisition of Internet Brands in September 2010, typically go for eight to 12 times earnings, said Moran. “AOL just spent 40 percent of their cash for very little near-term return,” said Moran. AOL expects Huffington Post to generate around $10 million in profit before interest and taxes and see savings of around $20 million meaning it would be valued at around 10 times 2011 profits.

The Internet company’s name is still a proxy for expensive mergers gone wrong following the unraveling of its $350 billion merger with Time Warner Inc in 2000. Once worth $163 billion, today AOL has a market capitalization of around $2.3 billion. Shares fell 3.4 percent to close at $21.19 on Monday.

Guess many AOL investors figured out this lefty politically motivated move to keep another lefty site bleeding red from going under isn’t worth the risk and showed that. I am glad I don’t own AOL shares. If you do, you might want to shed them too. Maybe The Huff Post will start streaming pr0n for AOl in teh future. That’s where the big bucks are.

Update: Who knows? Maybe they are intending to be “good corporate citizens, like Obama wants every company to be, instead of serving the interests of their shareholders. Hey Muirgy! Look! The marxist/statist/elitist twit thinks corporations are evil if they don’t give away their profits just like you do.

Posted by AlexinCT on 02/07/11 at 08:08 PM in Celebrity Idiots   Fun and Humor   Left Wing Idiocy   Politics   Law, & Economics   The Press Machine  • (0) TrackbacksPermalink
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