ACOM

Management, private-equity firm Permia, and Spectrum Equity will take Ancestry.com private. We don’t like the deal, but we will move on from this position.

According to the NYTimes DealBook, Best Idea Ancestry.com is in discussions with a private-equity consortium to take itself private at a price in the mid-to-high $30s, a 45% premium to its Tuesday closing price at the high end of the range.

On Monday, Best Ideas Portfolio holding Ancestry.com (ACOM) announced that it has added its 2 millionth active current subscriber, alleviating concerns regarding a subscriber growth slowdown in light of shaky consumer discretionary spending. We continue to expect Ancestry.com’s subscriber growth trajectory to be robust through the end of this year and into 2013 thanks to the release and digital indexing of the 1940 US Federal Census. We also find it probable that Ancestry.com’s management remains in talks with private-equity firms for a sale of the firm. But even if talks do not amount to much, we’re content with the recent pricing action from Ancestry.com and expect the firm’s shares to continue to converge to our estimate of their fair value … Read more

This article appeared on Seeking Alpha. Please view disclosures: https://seekingalpha.com/article/586801-ancestry-com-says-nbc-will-not-renew-its-television-show-but-we-still-like-the-shares Ancestry.com () announced today that NBC has decided not to renew its television series Who Do You Think You Are? for a fourth season. Though this wasn’t totally unexpected as we had sensed some nervousness by management about the potential for a renewal during its fourth-quarter earnings call (and its blanket “no comment” response on its first-quarter call), we are viewing such a disappointment as far from tragic. The biggest initial impact from the loss of the show will be in the first quarter of next year, but due to general seasonal strength in the business during that time of year, the headwind may still be a bit muted. We are … Read more

This article appeared on Seeking Alpha. Please view disclosures: https://seekingalpha.com/article/529871-ancestry-com-delivers-a-strong-first-quarter-report-up-10-percent-in-after-hours-trading Best idea Ancestry.com () reported fantastic first-quarter results Wednesday, blowing by consensus estimates on both the top- and bottom-line. Adjusted EBITDA and subscriber growth numbers also came in better than expectations. We are reiterating our $41 per share fair value estimate on the company and expect the firm to catch a bid tomorrow on its better-than-expected outlook, recent roll-up of competitor Archives.com, commentary regarding the high probability of NBC extending its top-viewing TV show Who Do You Think You Are?, and excitement around the marketing initiatives for a searchable database of the US Federal 1940 Census, the biggest catalyst for genealogical research in the past decade. The company’s subscribers grew an … Read more

This article appeared on Seeking Alpha. Please view disclosures: https://seekingalpha.com/article/373111-ancestry-com-beats-bottom-line-estimates-wall-street-shrugs One of the most difficult things to do as an investor is to accept that, despite one’s thesis playing out, a company’s shares may have a difficult time coming to reflect the estimate of its intrinsic value for any number of reasons (management, ongoing short-selling pressure, etc.). And while we have been quite forgiving of Ancestry.com’s (ACOM) management in the past and have been very open to the “short” thesis on the company, the firm’s investment in DNA has turned us off to the stock. We will be looking to trim our position in Ancestry.com in the portfolio of our Best Ideas Newsletter in coming trading sessions.   Our primary thesis on Ancestry.com (ACOM) is that … Read more

Ancestry.com (ACOM) reported disappointing third-quarter results Wednesday that showed management was a bit too optimistic in its subscriber growth forecasts for this year. However, we still like the story – and 30%+ revenue growth is nothing to sneeze at. We maintain the firm is significantly undervalued and expect some short covering in the weeks ahead, as the Street begins to look at 2012 numbers and anticipates the release of the 1940 US Federal Census in April. We’re holding strong with the position in the portfolio of our Best Ideas Newsletter.  Ancestry.com’s revenue advanced 30% thanks to strong subscriber growth, with the firm eclipsing the 1.7 million mark, representing 24% growth from the third-quarter of 2010. Churn edged up a bit … Read more

This article appeared on Seeking Alpha. Please view disclosures: https://seekingalpha.com/article/295916-in-defense-of-ancestry-coms-stock-price-slide Over the past few weeks, Ancestry.com has continued to take some major hits as short sellers look for confirming evidence of their thesis. We noted the bias of the investment community against the online geneological research provider in one of our previous posts here. Frankly, short sellers often take at face value a small portion of the company’s business metrics, in this case churn, and build up a case against the entire firm. We don’t think this is justified and maintain the firm is worth north of $60 per share. For starters, we outlined our discussion regarding the short thesis in a previous note here, and welcome interested readers to take … Read more