Why DoubleClick Is Getting Second Looks

By Gene G. Marcial

Edging Up--One Buyout Talk
Long rumored to be takeover bait, DoubleClick (DCLK ), a provider of Web services to ad agencies and online marketers, may finally get bought out: On Nov. 1 it hired Lazard to explore options -- including a sale of all or parts of its business.

The stock, which dropped to 4.52 in August on soggy earnings, jumped on the news -- from 6.36 on Oct. 29 to 7.21. Martin Pyykkonen of Janco Partners, who rates it "accumulate," says DoubleClick could find separate buyers for its data division, which helps catalog marketers manage mailing lists, and its tech unit, which handles clients' ad programs. A hedge-fund manager who owns stock says DoubleClick's cash stash of $400 million, or $3.50 a share, and its tax-loss carryforward of $200 million, or $1.50 a share, may attract a buyer for the entire company. He puts the takeover value at 10. Pyykkonen sees DoubleClick earning 23 cents in 2004 on sales of $293 million, and 25 cents in 2005 on $335 million.

Note: Unless otherwise noted, neither the sources cited in Inside Wall Street nor their firms hold positions in the stocks under discussion. Similarly, they have no investment banking or other financial relationships with them.

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