1. How to use GuruFocus - Tutorials
  2. What Is in the GuruFocus Premium Membership?
  3. A DIY Guide on How to Invest Using Guru Strategies
Articles (245) 

Icahn and Soros Lose on WebMD

January 11, 2012 | About:
Carl Icahn has taken considerable losses on his 8% stake in WebMD over the past few days.

Soros Fund Management also owns 5.6% of the entire company and has been adding shares recently.

WebMD (NASDAQ:WBMD) is down over 30% in recent days due to a handful of negative announcements.

First, the CEO of 10 years will be leaving the company. Short-sellers generally view executive departures as a sign of more trouble ahead.

Secondly, the company provided poor guidance of a 5%-8% decline in revenue in 2012. WBMD attributed the drop in revenue to competitive pressures and big pharma patent expirations.

Finally, the company has terminated the process to review a sale of the company. WBMD is no longer on the block and investors were massively disappointed.

The question is whether Icahn or Soros will now aim to take a more activist role in the company?

WebMD certainly boasts a lot of potential. Firstly, it is the second-most popular healthcare site in the world. It is a trusted source of healthcare information for 2.5 million visitors per month. Advertisers pay up for that kind of traffic.

The company only trades for 3x net tangible book value which is far lower than other Internet properties such as LinkedIn (NYSE:LNKD) or Groupon (NASDAQ:GRPN).

The stock most likely has another 25% downside before value investors begin to scoop up shares. Icahn or other activist investors will force a sale of WBMD if the turnaround in 2012 falters.

Rating: 3.3/5 (6 votes)


Wflorid - 5 years ago    Report SPAM
How are you calculating the downside?
Praveen Chawla
Praveen Chawla premium member - 5 years ago
What is the basis of your statement that "the stock most likely has another 25% downside before value investors begin to scoop up shares"?

Please leave your comment:

Performances of the stocks mentioned by matsandalex

User Generated Screeners

pbarker46Total Payout Yield
DBrizanrota16Jan2018 1143p
DBrizanrota16Jan2018 1118p
DBrizanrota16Jan2018 1114p
pbarker46BV & TBV
doniemaherScreen #27 - ROI
aroblessAJR - PIEC (Asia)
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)

GF Chat