Lycos Internet...trading at dirt cheap valuation

Discussion in 'Ask A Query About Your Stock Picks And Portfolio' started by sandeep1802, Dec 5, 2015.

  1. sandeep1802

    sandeep1802 Active Member

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    Lycos Internet..
    its have all ingredients to become a multi beggar...going through its financial result..its a debt free company and growing 25-30% rate.
    Its trading at 4 P/E ..(Surprised for this low valuation)
    business outlook is very solid...
    Any particular reason for this low valuation...
     
  2. sandeep1802

    sandeep1802 Active Member

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    It is also in Fortune india next 500 companies...
     
  3. Value Research

    Value Research New Member

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    The issue with Lycos is solved and now I believe the share is ready to move up.

    The stock price were beaten down because of a court case Ybrant digital(parent company) was fighting with the rival company DAUM.

    What was the issue - Ybrant(parent company) bought Lycos from Daum with 20 million dollars down payment and rest of the payment would be some X times the revenue. So the pending payment came out to be 36 million dollars.

    Lycos refused to pay this amount on the grounds of manipulation of revenues by DAUM appointed Lycos CEO and hence files a court case.

    They lost the case and court ordered to pay 36 million dollars to DAUM. Ybrant files bankruptcy to get time to file a counter case on DAUM.

    Later bankruptcy court asked Ybrant and Daum to settle the case outside the court and moved Ybrant out of bankruptcy.

    Then the US court appointed a sheriff to get the transaction done.

    But Lycos Contributed only 1.2% to the overall profit and 5.6% to the net asset of Ybrant. So paying 250 Cr (36 million dollars) was a bad deal for Ybrant as well as the investors.

    Finally court ordered Ybrant to hand over the share of Lycos it owned(56%) to DAUM.

    So now the company has been renamed as Brightcom, which is their signature brand.

    This court case was the reason of fear to beat down the share prices to Rs 5-6 and now this issue is solved the share price has a good chance to reach its intrinsic value of 60 Rs – 70 Rs at 10 PE.


    “Comments and other perspectives are welcome”
     
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