Thursday, January 15, 2009

Remember Henry Blodget? Where is he Now?

Remember Henry Blogett? If not, he was the analyst that Merill Lynch payed millions to hype internet stocks. First it was "eyeballs". Then immediately before the Internet stock bubble burst--March 2000--he was selling B2B at his big annual conference in New York.

I remember the CEO (or was it the CFO?) of Verticle Net was one of the "big" featured presenters. He cried for 20 minutes about how people were saying bad things about him and Verticle Net on internet message boards. I kept thinking to myself, does this guy actually spend his time worrying about what teeny weeny investors are saying about him on the Internet? Is he doing any real work? He did tell us how Verticle Net was going to own about 50 verticle markets on the Internet. Industry areas like chemicals. LOL. I kept thinking where is the Beef? I did get a nice lunch at the Plaza Hotel. Or at one of those really great hotels in NYC.

Shortly after the conference Verticle Net traded up around 255. I tried to short it but you couldn't borrow the stock. What does that tell you? Shortly thereafter the stock started its march and attack on zero. By that I mean a stock price of zero.

Well guess what? Henry is now bearish on an internet stock--Google. Yep.

If you are interested in reading what Henry has to say these days go to

Google 2009 Estimates Still Too High (GOOG)

Lastly, transitions from "growth stories" to "margin stories" usually take years, not months. The only way Google will hit the $500 targets bullish analysts are stubbornly maintaining is if the market as a whole recovers and it rises with the tide. A more likely scenario, in our opinion, is that analysts keep cutting their growth estimates and eventually cut those targets to the mid-to high- $300s by the middle of the year. Of course, if the market continues to drop, GOOG could be in the low-$200s by then.

Subscribe to EF Hutton via Email

Follow EF Hutton on Twitter