Ancestry.com Shakes Up the Family Treehttp://www.fool.com/investing/general/2011/09/14/ancestrycom-shakes-up-the-family-tree.aspx Rick Aristotle Munarriz
September 14, 2011
Editor's Note: Contrary to reporting in a previous version of this article, Wedge Partners doesn’t issue earnings estimates. The Fool regrets the error.
There's always someone who messes up a family reunion.
Yesterday, Wedge Partners issued a cautious research note on Ancestry.com (Nasdaq: ACOM ) after analyzing the leading premium genealogy site's recently tweaked pricing. The stock took a nearly 7% hit on the news more than 4 million shares in trading volume.
That's quite the stampede, especially on the heels of Ancestry.com shares trading much lower earlier in the day, before a Bank of America analyst stepped in to call the downturn overdone.
In a nutshell, Ancestry.com bumped its monthly rates higher but provided better discounts on longer-term subscriptions.
This is actually a smart move for Ancestry.com, since a lot of new members go in with the intention of quickly scouring through the site's 7 billion records before moving on. They don't immediately realize that genealogy is a long-term pursuit and that eve