ValueClick Shares Plunged: What You Need to Know

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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of ValueClick (NAS: VCLK) took a 13% nosedive after the company reported earnings, but then recovered slightly.

So what: Revenue jumped 26% to $125.1 million, topping estimates of $121.2 million from Wall Street. Earnings per share were $0.21, which also topped estimates of $0.19. But an acquisition is what investors are fixated on today.

Now what: A solid earnings beat and then the stock sinks -- that doesn't make any sense until you see that ValueClick also announced it would buy Dotomi for cash and stock. The deal will be paid 55% in cash and 45% in stock, and investors aren't terribly excited about it. ValueClick's forward P/E ratio of 16 is a pretty good value considering the growth and earnings this quarter, so I think this move is well overdue.

Interested in more info on ValueClick? Add it to your watchlist.

At the time this article was published Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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