Monster Worldwide, Inc. (MWW) recently announced that it retained Stone Key Partners LLC and BofA Merrill Lynch as its financial advisors in connection with its review of strategic alternatives done previously.
Last week, Monster announced that it is considering strategic alternatives to boost shareholder value in the coming months.
At a conference held last week, Monster stated that the near term priorities for the company includes executing on its share buyback program and return excess cash to shareholders, focusing on incremental growth opportunity with SeeMore and Government Solutions and implementing $100 million cost savings initiative to increase marketing campaign and sales efforts.
In January, Monster announced a series of cost savings initiatives amid uncertain global environment. These activities include a workforce reduction of approximately 400 associates, or 7% of its full-time staff on a global basis, consolidation of certain office facilities along with control in discretionary spending.
Earnings estimates have declined significantly in the last few days after Monster Worldwide reported weak results for the fourth quarter of 2011 and provided a disappointing guidance for the first quarter of 2012. Fourth quarter results missed the Zacks Consensus Estimate by a penny.
Competition has intensified over the last few years in the online employment advertising market, which in our view has resulted in Monster losing share. Though Monster once had a dominant position, there are now several national competitors (i.e., CareerBuilder) as well as niche sites (i.e., Dice, JobsintheMoney, TheLadders, SnagAJob, etc.). Many of the cutting-edge recruiters have reduced their use of job boards in favor of alternative social media sites, such as LinkedIn and Twitter.
Management is concerned about a recessionary environment. Firms around the world are scaling back their hiring plans and more carefully controlling their spending.
Hence, with the news of Monster mulling strategic alternatives for its shareholders, the stock price jumped 6.78% to close at $8.05 in after-market trading.
We continue to maintain a Neutral recommendation on Monster. Our recommendation is supported by Zacks #3 Rank, which translates into a short-term rating of Hold.
MONSTER WWD INC (MWW): Free Stock Analysis Report
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