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To: Glenn Petersen who wrote (82)5/27/2005 10:28:19 PM
From: Tom Caruthers
   of 133
 
Hi Glenn,

I have picked up some shares at this level after selling some fortunately at the high. I am still a big believer in this concept. I am waiting to pick up a lot more on a retreat to under $6. The stock has violated its support and the volume on up days is very poor.

Tom

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To: Tom Caruthers who wrote (85)8/1/2005 4:01:40 PM
From: Glenn Petersen
   of 133
 
A nice move from KNOT today. Earnings out on August 11. If Federated (is stupid and) dumps its (future) position, you may get an opportunity to add some shares below 6.

NUPTIALS

Take the Plunge: It’s Time to Buy the Knot

The small-cap wedding specialist is registering big gains in online-ad sales.


By Matthew Boyle

Ah, to be young, in love, betrothed—and in a state of panic over where to find the reception hall, the bridesmaids’ dresses, and the DJ. That’s where wedding specialist the Knot (KNOT, $7) comes in. Founded in the dot-com froth of 1996, the Knot not only survived the bubble but has emerged as the web’s go-to spot for nuptials-related content and services. With more than 2.1 million visitors a month, its flagship site (theknot.com) is attracting a passel of advertisers eager to grab their share of the $70 billion that’s spent annually on weddings in this country.

That huge web presence gives this small fry (market value: $155 million) great growth potential. The Knot’s online-ad revenue increased 41% in 2004 and is growing even faster this year. To broaden its appeal, the company recently added sites designed to target newlyweds (thenest.com) and singles (greatboyfriends.com). It also cut a deal with Target’s gift registry—the largest in the U.S., according to NPD Houseworld—to shore up a glaring weak spot in its retail business. KNOT is currently trading at nearly 100 times its previous 12 months’ earnings. But JMP Securities’ Bill Morrison, the lone analyst who covers the Knot, expects profits to jump from 11 cents a share this year to 31 cents in 2006. Based on those projections, KNOT is now trading at a forward P/E of 26. "We think online media is a growth area, and the Knot is the dominant media asset in its niche," says Henry Ellenbogen, co-manager of T. Rowe Price’s highly rated Media & Telecommunications fund, which owns around 200,000 shares of KNOT.

As with any union, though, saying "I do" to the Knot has its risks: Investors should keep a close eye on what occurs once retail giant Federated completes its acquisition of May Co., which has a 16% stake in the Knot. (Federated is a shareholder and partner of WeddingChannel.com, the Knot’s main rival.) Should Federated sell May’s shares on the open market, it could put a damper on KNOT for several months. Still, we think this wedding party is worth crashing.

fortune.com

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From: Glenn Petersen8/11/2005 1:13:27 PM
   of 133
 
Nice quarter:

The Knot Reports Strong Revenue and Net Income Gains for the Second Quarter and First Half of 2005

Thursday August 11, 8:30 am ET

Revenue Growth of 25% in Second Quarter Includes 45% Online Advertising Gain

Reminder: Conference Call Today at 2:30 Dial-In 800-638-7172 (ID#7896103)

NEW YORK--(BUSINESS WIRE)--Aug. 11, 2005-- The Knot, Inc. (NASDAQ: KNOT - News, www.theknot.com - News), a life stage media company offering the premier wedding resource, today reported financial results for its second quarter and six months ended June 30, 2005.

Second Quarter 2005 Results

For the second quarter ended June 30, 2005, The Knot reported net revenues of $13.6 million, up 25% from net revenues of $10.9 million for the second quarter of 2004. The major contributor to the higher revenues was an increase in local and national online advertising, which rose 45% over the prior year. Publishing and other revenues rose over the prior year's quarter by 28%, and merchandise revenue also showed a gain.

"Local online advertising remains a very strong component of our growth, up 56% over the prior year, as we continue to expand our penetration into the local markets" said David Liu, CEO of the Knot. "Our national online advertisers are increasing their average spend with us and we are clearly benefiting from the combination of the power of our brand and the growth in online advertising in general.

The Knot reported net income for the second quarter of 2005 of $1.3 million or $0.06 per basic and $0.05 per diluted share as compared to $182,000, or $0.01 per basic and diluted share in 2004. Total operating expenses in the second quarter included approximately $1.6 million in professional fees related to the Company's current litigation with WeddingChannel.com, Inc. During the second quarter of 2004, these legal fees amounted to $625,000.

"Revenue from retail sales of wedding supplies has improved," Mr. Liu continued, "and we are realizing savings from operating efficiencies established at our distribution center in the past twelve months. We were also pleased with the growth in our local publishing programs in the second quarter."

Last year in the third quarter, the Knot launched TheNest.com, which extends the relationship with its members through the initial years of marriage. "We draw our audience by directing registered couples on TheKnot.com to TheNest.com when they return from their honeymoon," Mr. Liu said. "We are encouraged to see the steady growth in TheNest.com online community over the first half of 2005." According to recent industry statistics from Hitwise, in the month of July, TheNest.com ranked 24th in visits for women's interest sites.

Results for the Six Months Ended June 30, 2005

For the six months ended June 30, 2005, The Knot reported net revenues of $25.5 million and net income of $1.7 million or $0.08 per basic and $0.07 per diluted share compared to net revenues of $20.7 million and net income of $85,000 or $0.00 per basic and diluted share in 2004.

Recent Highlights

In June, The Knot relaunched its recently acquired referral-based online dating websites, GreatBoyfriends.com and GreatGirlfriends.com. The new sites feature the brand's trademark social-networking approach to online dating, a smart design, simple navigation, enhanced profiles and dating editorial from ELLE magazine relationship guru (and site cofounder) E. Jean Carroll. The sites extend The Knot's lifestage media brands and services to a wider audience on the Web.

Also, in June, The Knot announced the appointment to its Board of Directors of Lisa Gersh Hall, President and Chief Operating Officer of The Oxygen Network and Matthew Strauss, Vice President of Content and Development at Comcast. Their experience in media and the development of new media services will be a significant resource to The Knot as it continues to expand its existing business and launch new services for its members.

In May, The Knot teamed with Sony Classical to produce a compilation of ceremony music featuring twenty-nine tracks handpicked by The Knot's Editor in Chief Carley Roney including preludes, processionals, interludes and recessionals from the world's most renowned classical musicians. A one-stop ceremony music solution, the CD is sold exclusively at Target stores and online at TheKnot.com and was promoted through a radio media tour that generated over 655 airings and reached over 32 million listeners.

Also, in May, to leverage the height of the June wedding season, The Knot executed a multi-platform public relations campaign surrounding wedding gift shopping trends and etiquette. Over 15,000 brides and newly married couples participated in a wedding gift poll on TheKnot.com. Carley Roney revealed survey findings and showcased her top gift picks in a 20-city satellite media tour, a 20-city radio media tour, and interviews with the nation's top press outlets, generating over 41 million audience impressions.

AUGUST 11 CONFERENCE CALL AND WEBCAST

The Knot will host a conference call with investors at 2:30 p.m., ET on Thursday, August 11, 2005, to discuss its second quarter 2005 financial results. Participants should dial in 800-638-7172 (# 7896103) at least 10 minutes before the call is scheduled to begin. Participants can also access the live broadcast over the Internet on the Investor Relations section of The Knot Web site, accessible at www.theknot.com/investor-relations.

To access the Web cast, participants should visit The Knot Web site at least 15 minutes prior to the conference call in order to download or install any necessary audio software.

REPLAY INFORMATION

A replay of the webcast will also be archived on The Knot website approximately two hours after the conference call ends for a period of two weeks and will also be available at 800-642-1687 reference # 7896103.

<snip>

biz.yahoo.com

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To: Glenn Petersen who wrote (87)8/12/2005 2:43:20 AM
From: Tom Caruthers
   of 133
 
Hi Glenn,

I agree. Nice quarter. Now if they could only make Wedding Channel go away. Hopefully the KNOT will prevail in legal proceedings and then just beat the pants off of WC in the market.

I was then thinking what would happen if they took Wedding Channel over? The $6M or so in legal fees goes away. They become the dominant player...the only player in the wedding space. All the ad revenue goes to them. Would I be willing to take a 25% dilution - implied takeover value of $50M? Yes. 50%? Implied value $100M, don't know. If WC was doing so well, they would be public already.

The owners of WC should realize that 100% ownership of WC means they will still need to flog against a stronger competitor - KNOT - for years to come. But 25% ownership of the only kid on the block could mean much more rapid returns.

Here's some stats on Wedding Channel.
110 employees
Investors include some well known names: Amazon, Federated, Goldman Sachs, Kleiner Perkins (of Google fame)
$46.5M invested in the company to date, last in 2000 (makes a $50M buyout less likely).

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To: Tom Caruthers who wrote (88)8/29/2005 11:23:13 AM
From: Glenn Petersen
   of 133
 
Target may have an interest in KNOT:

Internet Mergers: Who's Next?

As the Web matures, the pace of deals is picking up again, spurred by reasonable price tags on some of the smaller outfits


AUGUST 29, 2005

NEWS ANALYSIS
By Steve Rosenbush

Deal-making has returned to the Internet sector with an intensity not seen in years. Web companies have shaken off the stigma associated with the Nasdaq crash of 2000 and are attracting big buyers from both the on- and off-line worlds. Advertisement

In the past year, News Corp. (NWS ) has announced plans to buy Intermix (MIX ), parent of social-networking site Myspace.com, for $580 million in cash. New York Times Co. (NYT ) purchased search site About.com for $410 million in cash. And Dow Jones (DJ ) bought news site Marketwatch.com for $519 million in cash.

But the acquisitions may have only just begun. One media executive says investment bankers are making the rounds with a list of potential targets that includes a dozen or more Internet companies.

BIG FISH SNAPPING. One possibility: Theknot.com, (KNOT ), a wedding planning site, which is on the block and has held talks with a number of potential suitors, BusinessWeek Online has learned. The leading potential buyer is retailer Target (TGT ), according to one company insider. While no one knows for sure whether they will combine, the companies have had a business partnership since April, cooperating on a bridal registry service. Both declined comment for this story.

Such a deal would follow a recent pattern of large, traditionally brick-and-mortar companies snatching up small and medium-sized Internet outfits. Of course, Web giants like Yahoo! (YHOO ) and Google (GOOG ), with market caps of $48 billion and $80 billion, respectively, would cost far too much to acquire -- but other, smaller candidates abound.

Theknot.com, for one, has existed since the 1990s and posts a net profit. But it's a relative bargain, with a market cap of $230 million -- a drop in the bucket compared with Target, worth nearly $50 billion.

THE PRICE IS RIGHT. "There has been a real bifurcation of value among Internet companies. The big ones are out of reach, and some of the smaller ones look cheap. That tends to drive activity," says D. Jonathan Merriman, CEO of investment bank Merriman Curhan Ford. While the bank has worked with Theknot.com in the past, Merriman said he had no knowledge of the company's immediate plans and declined to comment on whether it was on the block.

The hottest targets tend to have valuations well under $1 billion. Although it's known that news site CNET (CNET ) is up for sale, with a valuation of $1.9 billion, it has had little luck finding a buyer. The same holds true for gaming site IGN (see BW Online, 8/22/05, "IGN Entertainment: Where the Boys Are"). The privately held company is looking for a sales prices of close to $1 billion. With no takers in sight, it may head for an IPO.

But the price of many well-regarded sites is just right. With a valuation of $440 million, the women's-oriented media site ivillage.com will likely find a buyer, investment bankers say. One possible outcome: a merger with rival Lifetime Entertainment, a venture of Disney (DIS ) and Hearst.

LESS STIGMA. Industry watchers consider privately held movie-listing service Fandango.com a logical partner for AOL's Moviefone.com. "But the buyers are almost never who you expect them to be," cautions Jack Flanagan, senior vice-president at Internet researcher comScore Networks. "They tend to come out of the blue, like New York Times and About.com."

The current round of M&A activity dates back all the way to October, 2003, when Time Warner's AOL (TWX ) said it would buy Advertising.com for $435 million. The deal signaled that Time Warner had recovered its equilibrium after combining with AOL in a merger sometimes derided as the worst of all time.

The AOL-Advertising.com deal anticipated a huge runup in the online ad business. And a clear trend has emerged: The Web is drawing advertising dollars from traditional media. Global online-advertising revenue is expected to rise nearly 40% this year, to $13 billion, from $9.6 billion in 2004, according to Ken Marlin, managing partner of Marlin & Associates, an investment bank and adviser to media companies. That equals more than five times the pace of growth in most traditional categories.

REGARD WITH SUSPICION. Global growth is driving Internet M&A, too. China ranks as particularly important. The IPO of China-based search company Baidu.com (BIDU ) earlier in August drew attention to the sector (see BW Online, 8/22/05, "There's More Where Baidu Came From ").

Yahoo has made an investment in China's Alibaba.com. "We have held Chinese Internet companies for a long time. They are an important source of future growth," says Ryan Jacob, CEO of the Jacob Internet Fund, which has $70 million invested in Internet companies.

Jacob regards China's Sohu.com as a likely target because of its search technology. And he considers its price reasonable. From a strategic point of view, he likes instant-messaging site Tencent.com. He says an IM deal won't arouse the ire of regulators in the Middle Kingdom, who tend to regard with suspicion Western-owned news and media ventures. And IM can be used as a platform for all sorts of services that generate ad revenue.

<snip>

us.rd.yahoo.com*http://yahoo.businessweek.com/bwdaily/dnflash/aug2005/nf20050829_4334_db016.htm

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To: Glenn Petersen who wrote (89)8/30/2005 12:57:52 AM
From: Tom Caruthers
   of 133
 
I saw that. The share price seemed to react favorably but then closed negative for the day. We may see some more churn in this range. It frankly surprised me that KNOT was looking for a suitor.

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To: Tom Caruthers who wrote (90)9/14/2005 6:59:05 PM
From: Glenn Petersen
   of 133
 
According to a poster on Yahoo, David Liu, the CEO of KNOT, was going to make an appearance on CNBC late this afternoon. That may explain today's pop.

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To: Glenn Petersen who wrote (91)9/14/2005 10:06:22 PM
From: Tom Caruthers
   of 133
 
Hi Glenn, there is a rumor that Target is looking at KNOT as a possible acquisition. KNOT has been shopping around for a suitor.

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To: Glenn Petersen who wrote (91)10/30/2005 1:03:46 AM
From: Tom Caruthers
   of 133
 
Glenn,

I was a little surprised how sharply the stock jumped to $14 (though I was not complaining) and then disappointed that the stock fell back to support. Hopefully it will hold here going into earnings. Are you still holding KNOT?

Tom

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To: Tom Caruthers who wrote (93)11/1/2005 2:07:37 PM
From: Glenn Petersen
   of 133
 
Tom,

I'm still holding. The price got a bit ahead of itself a couple of weeks ago and fell back when the company got hit by a downgrade. It is bouncing back nicely.

Glenn

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