>GSI Commerce: Very Overvalued at This Level

January 27, 2011

>A Boston presenter recommends a short on GSI Commerce (NASDAQ: GSIC, $23.50). This provider of e-commerce solutions is facing a serious threat from Amazon, Digital River and some larger rivals in a fiercely competitive market for outsourced online services. The company has been able to grow its top line very consistently, but profitability has remained elusive. Five largest accounts generate close to 40% of the total revenue, and there is a real possibility some of these customers may take their e-commerce operation in-house. The stock is trading at approximately 100 times projected 2012 earnings. The share count has been diluted significantly in the last several years to help finance a string of acquisitions.

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