• Jeff Matthews

No Slowdown Yet


Yesterday’s panic-selling in Google—in response to a report that internet search pricing was weakening—may or may not be rational, given the fairly high altitude Google’s stock has achieved in recent weeks.

However, there is no weakness in internet search pricing that at least one large internet word buyer, online jewelry retailer Blue Nile, is seeing.

And Blue Nile should know better than most, because it spends about a third of its online advertising on search.

I saw Mark Vadon, the founder and CEO of Blue Nile here in New York today, and for what it is worth, I think he runs a nice, consistent business. Every time I see the company, I want to buy the stock—although the valuation always holds me back.

The business is a bit like Price Club meets Tiffany: sell the product at a significant discount to retail, collect the money the next day from the credit card company, and pay the vendors 45 days later.

Negative working capital with 23% gross margins and no stores: not bad.

Tomorrow we will explore other aspects of online jewelry retailing, with a different slant, as we return to the antics of someone whose “Build Your Own Jewelry” business ought not to cause Blue Nile to lose any sleep at all.

Jeff Matthews I Am Not Making This Up

The content contained in this blog represents the opinions of Mr. Matthews. Mr. Matthews also acts as an advisor and clients advised by Mr. Matthews may hold either long or short positions in securities of various companies discussed in the blog based upon Mr. Matthews’ recommendations.

1 view0 comments

Recent Posts

See All

Donald Immelt?

“It became clear right away that my main role would be Person to Blame,” Mr. Immelt writes in his new book “Hot Seat: What I Learned Leading a Great American Company,” which will be published Feb. 23.

Spot the Non-Sequitur

First, this headline from the Wall Street Journal, February 5, 2021: Bill Gates Joins Private-Equity Firms in $4.7 Billion Deal for Private-Jet Company Private-jet travel is booming amid travel restri

BROWSE CATEGORIES

Stay up to date with an insider's look into The World of Wall Street.

Great! You're all signed up.