MARKET REPORT: A big Burst for the media men
Two of the happiest men in the City yesterday were David Stein and Jarvis Coffin. The co-founders of Burst Media saw shares of the online advertising company soar 19.50p or a stonking 390pc to 24.50p on news of a £18.5m or 25.08p a share cash bid from blinkx, the world’s largest video search engine. It made their 14.9pc and 13.6pc share stakes in the company wor th £ 2.7m and £ 2.5m respectively.
blinkx jumped 11.25p to a 52-week peak of 122p as analysts gave the thumbs up to the deal and to the company’s accompanying trading update. It continues to trade strongly in the second half of the year and management predicts a rise in full-year revenues to more than £37m, an increase of 90pc on last year.
Mike Savage at broker Killik says the rationale behind the Burst Media deal is to offer blinkx’s 35m hours of online video and TV to Burst’s audience of over 130m unique users, and take advantage of the significant pricing differential between traditional between traditional display banner adverts with blinkx’s standard, untargeted video pre-rolls.
Savage has long been a fan of blinkx and still believes the shares offer investors almost unique exposure to the monetisation of the explosive growth in online video consumption.