Does anyone know why MELI tanked today? I read the news about the takeovers, and those seemed like pretty positive events. Thoughts?Aaron
This board has been pretty quiet lately.(A few weeks ago) I read the fool's book, and researched this stock. Everything appears positive.My foolish assumption:Two stocks i own, QWest and MELI.QWest wants to aquaire UsWest and Frontier.Price dropped 23%! Meli did aquire two new small business,Price dropped 8%.So the conclusion is that if the company attempts ordid acquire some new business, the stock price willdrop. I don't understand why, and if someone canexplain please do. Meli is making more money according to their financial,more cash for expanding their business, increase the client database.With Y2k around the block, old business's call systemneeds to be upgraded, new equipment will be purchased.From what I can tell, everything looks good for this year. So, I decided to hold their stock for one year.Maybe my logic is not foolish enough for a computer programmer. :-)
Digesting acquisitions is always a little fraught and the results can be uncertain in addition to costing extra cash as operations merge, overlaps are eliminated etc.Good to see the company is strengthening their online presence with eShare. The purchase of Smallwonder looks pretty smart as well. A lot of companies are moving to the web in an effort to downsize their call center operations. Though talking to a human will always be necessary when dealing with difficult questions (hopefully), it's much cheaper to do things on the web. So small to mid-size call centers are probably going to be in-vogue in the future.
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