Jefferies & Co. Thursday downgraded shares of 24/7 Real Media Inc. from buy to hold, noting the 30% run-up in the online ad company’s stock price since Google Inc. lobbed a bomb in the sector by agreeing to buy DoubleClick Inc. in April for $3.1 billion. Jefferies analysts Youssef Squali, Hagit Reindel and Naved Khan also say that odds of a deal reportedly in the works for Microsoft Corp. to snag 24/7 Real Media are diminishing now that it appears the software giant may strike some kind of partnership with Yahoo! Inc.
Still, 24/7 Real Media, which yesterday hung out the for-sale sign after disclosing that it has hired Lehman Bros. Inc. to consider strategic alternatives, remains a target, they say.
“To be sure, we still see [24/7 Real Media] as a very attractive take-out candidate to a large media company or advertising agency. [It] is the smallest of the publicly traded online marketing services companies in terms of market cap (around $500M at today's price), and therefore is a ‘good’ bite-size for a larger player.” —Alain Sherter
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