Own a Piece of Slashdot

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January 4, 2006 | SIN Picks | | Author Asif

I came across this excellent blog on the internetstockblog.com about Slashdot and its parent company VA Software. I was pleasantly surprised to learn that Slashdot was part of a public company. Slashdot is a very geek-centric website that has a loyal following and is an excellent source for computer security information. I am going to take the liberty of saying that Slashdot is to geeks what the Wall Street Journal is to investors and business folks.

After reading David’s blog and learning about the sale of the “Animation Factory” part of the business by VA Software for $9.35 million, I started a small position in the stock today. The reasoning behind my trade was that even if VA Software were not to break even in their fourth quarter as expected, this new influx of capital should keep them afloat for 2 years at their current cash burn rate of $4.69 million (which has incidentally been falling for the past three years). Slashdot is worth a whole lot more than Wall Street realizes and the current rise in web advertising prices is very positive for the company. The “Animation Factory” part of the business did not fit in well with the rest of VA Software and selling it was an excellent idea. The stock closed today at $1.77 and is very thinly traded with an average volume of just 246,494 (as of Jan 4th, 2006). This could make it very susceptible to wild price swings.

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