In the end, Provide Commerce
Justice came in the form of a buyout price that was nearly twice the price that Provide's shares were fetching when the company missed its March quarter targets earlier this year.
The April swoon proved to be short-lived. Provide Commerce bounced back on the heels of a strong Mother's Day holiday and a blowout June quarter. The company's attractive business model at ProFlowers.com, promising flowers that were "direct from the fields," clicked with customers.
From Amazon.com to Martha Stewart Living
It made Provide Commerce dangerous, and that led to a lawsuit by FTD back in August, claiming that Provide's claims were deceptive because the company would sometimes house inventory in refrigerated warehouses on the way to its end users. The litigation wasn't entirely without merit, and that may have been what spooked Provide Commerce into considering an exit strategy that would still deliver a premium to its investors.
Earlier this year, Provide Commerce was recommended to subscribers of the Motley Fool Rule Breakers newsletter service. It's not the first pick from the premium research product to be acquired at a respectable markup. Archipelago Holdings
Eyeing the Rule Breakers scorecard -- already up three times as much as the S&P's return over the same timeframe -- I see at least a half-dozen more active picks that could become buyout bait in 2006. You can see for yourself with a free trial subscription.
These are certainly exciting times. Liberty Media will get a quality outfit that will fit perfectly with some of its properties like QVC and Travel Channel. Investors will get a check for $33.75 a stub, which should be good for a dozen flowers to celebrate -- or commiserate -- the occasion.
The stock closed out the trading day at $33.76, which indicates that the market thinks a higher offer may be on the way. I don't necessarily see it that way, although one can't help but wonder whether Amazon will make a play here, because the two would be so perfect together. Either way, it will just be a matter of time before Provide Commerce heaves that bridal bouquet in the air.
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Longtime Fool contributor Rick Munarriz did use Provide Commerce to deliver flowers to his wife on April Fool's Day. Yes, it's a holiday around these parts. He does not own shares in any of the companies mentioned in this story. T he Fool has a disclosure policy. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.