Last week, Bloomberg reported that Monster Worldwide Inc. (MWW) is being removed from the S&P 500 after losing almost $5 billion in market value in the last five years. With a stock price low enough to force the world’s largest online-recruiting company out of the S&P 500, there’s some very public speculation that the global employment advertising company could be bought by a private equity fund. According to the Bloomberg article, the company has plunged 66 percent this year, the most in the Standard & Poor’s 500 Index, as American businesses remained reluctant to hire.
Rumors have periodically made the rounds of a potential or even pending sale — 20 of them since 2006, according to Bloomberg. All have proven false. But now, says the financial news service, financial analysts and some of Monster’s largest shareholders say the time and price may be right for a takeover.
“The valuation is absurdly cheap,” Eric Green, a Philadelphia-based fund manager at Penn Capital, told Bloomberg. With 3.2 million shares of Monster stock, Penn Capital is one of the company’s largest shareholders.
“The stock has been a clear disappointment,” Green is quoted as saying. He suggested a takeover price of $15 a share. That’s more than a 92 percent premium over Friday’s closing price of $7.71. “I would love to see someone buy it,” he said.
Monster’s stock price has declined steadily since hitting a 10-year high of $59.28 in May, 2006. In the last 12 months, the stock has been as high as $25.90, reaching there in January, when the economy seemed ready for a hiring surge. Since August, it has been under $10 a share. The market value of the company is now about $1 billion, $5 billion less than it was worth in 2006.