Tree.com(TREE) opinion

By: ispeculatornew
Date posted: 01.26.2009 (4:00 am) | Write a Comment  (0 Comments)

      Post a Comment

Tree.com was the result of a spinoff from IAC interactive Corp last year, and as I discussed last week, I have not been a fan of IACI recently so for them to finally do a spinoff of this once important segment of their business was interesting to say the least. I’m not sure of the reason behind although it hardly seems like they were trying to set aside a new growth opportunity. Tree.com is a sum of various parts owned by IAC Interactive in the field of real estate and more specifically in the area of helping investors or owners value their house, get a new mortgage, refinance their property, etc. Their main properties are:

  • Lendingtree.com (personal loans, auto loans, credit cards, etc)
  • RealEstate.com(locating homes, getting values, etc)
  • GetSmart.com(loans & credit cards comparison website)
  • HomeLoanCentre(resource website for home buyers
  • Domania.com(locating homes, getting values, etc)
  • etc
  • They built a whole array of properties that were targetting a major segment of the consumer business real estate web arena. Problem is, even in the past, this company was not profitable so it’s not difficult to imagine that the next few months will be very difficult. While they have spent money on acquisitions and such, their core operations have also not been able to generate a profit.

    At last year’s pace, Tree.com would not have much left to play with on its balance sheet and I would think that things could get considerably worse. And while they do have important assets (LendingTree.com, Realestate.com, etc), they are in a very tough area of the economy. With the collapse in house pricing of the last year or so, it is difficult to imagine many home buyers being ready to jump back in the game even when prices do become more stable. So their revenues would probably continue to slow for a long time even after an economic recovery. And with consumers becomming more prudent in this area of their finances, they might be tempted to use professionals instead of doing it all themselves thus hurting the area where Tree is targetting.

    Of course, with the price of Tree being so low, there is a lot of speculation involved and the price has actually moved between 11.10$ and 1.42$, very volatile. I would not be long this stock long term, and might be tempted by smaller term plays either as long or short, but to me it is very interesting that some investors are owning this stock, I honestly do not see much value in it all things considered. I might do a trade shortly involving Tree so stay posted.

    If you liked this post, you can consider subscribing to our free newsletters here


    No Comments

    No comments yet.

    RSS feed for comments on this post.

    Sorry, the comment form is closed at this time.