I have been a fan of iVillage
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
While it might be too much to expect prudence from a debutante, I figured that iVillage was better than this.Do we need different portals for male and female users? Are there some Wall Street issues that matter more to women than to men? Does gender matter in deciding who will manage your money? All this and more in the Women & Investing discussion board. Only on Fool.com.
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.