Green iVillage

I have been a fan of iVillage (Nasdaq: IVIL) as an investment, even when buying into the Internet's popular estrogen-laden portal wasn't cool. If you go back to April 1999, when euphoric speculators bid up the shares to $130, and the nadir that followed after a string of steep losses sent the shares down to pennies, the road back to respectability has had its share of potholes.

iVillage's fortunes changed back in February when it posted the first profitable quarter in the company's history. While the following quarter produced a small loss, it did so on positive operating cash flow and accelerated revenue growth.

This was supposed to be the start of something good, bolting CFO notwithstanding. All this brings us to yesterday, when the company completed a stock offering that found it issuing 11.6 million new shares at $6 a pop. Say what?

I'm left unimpressed. Sure, the move more than quadruples the company's cash balance while doubling its book value, but what was the rush? After being an underage penny stock for so long, it's the equivalent of running off to Vegas to get punch-drunk on your 21st birthday.

If the company had been waiting this long to exhale, surely it could have waited a few quarters more. String together a few more nice financial reports, and the share price would have continued to appreciate, providing even more greenery with less share dilution. Doing so now makes one wonder if the company is as upbeat about its future as the fundamentals seem to suggest.

I see the temptation. Rates are rising, giving cash-rich companies a competitive advantage. Sector consolidation is bound to continue, and loading up the vault is a great way to lock up a role as a strategic acquirer. However, companies like Motley Fool Stock Advisor recommendations eBay (Nasdaq: EBAY) and Amazon (Nasdaq: AMZN) have had spectacular runs because of their fiscal consistency.

While it might be too much to expect prudence from a debutante, I figured that iVillage was better than this.

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Longtime Fool contributor Rick Munarriz loves women so much that he married one. He does not own shares in any of the companies mentioned in this story.