March 2, 2012
Monster CEO Speaks, Stock Price Rises
Monster Worldwide Inc CEO Sal Iannuzzi, speaking this week at a Robert W. Baird & Co conference in Boston, said that he is considering “strategic alternatives” in order to increase investor value in Monster stock.
After he spoke, the price of Monster Worldwide stock increased 15 percent to $8.01 at the close of the New York Stock Exchange. This increase was Monster´s largest price advance since August. Over the last year the stock price has plummeted 52 percent, reports Bloomberg.The slow economy has hurt Monster, as well as competition from social media sites like Facebook and LinkedIn. Monster earns most of its revenue by selling job ads on its website, but the slow job growth in this economy has dampened their earning potential.
Monster is reported to be performing worse than its largest competitors, such as LinkedIn, Dice Holdings Inc, Manpower Group, and Careerbuilder which is partially owned by Microsoft.
LinkedIn, who offered their Initial Public Offering of stock back in May has already seen their stock price double.
Iannuzzi said, “The stock price is not where it should be. If you compare us to our competition, any company in our space, our multiple is severely below them.”
In order to increase the competitiveness, Monster is looking to cut costs. They plan to cut their staff by 7 percent, or around 400 jobs.
Since they are cutting their staff, a purchase of Monster by another company would be out of the question. According to James Janesky of Avondale Partners, “Given that the company is engages in layoffs of 7 percent of its work force and other restructuring, any kind of deal might be a ways off.”
But are they planning any major purchases in the coming months? Iannuzzi says, “We have no acquisitions in mind. So if anyone´s concerned about where our money is going to go, we don´t have acquisitions. Any excess cash will be returned to the shareholders via stock purchase.”
The news spurred options traders to push up the volume of Monster stock around 32 times higher than a normal day. According to Reuters, Monster shares were up $1.21, or 17.4 percent, at $8.15 in late trading on the New York Stock Exchange.
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