Thursday, September 24, 2009

American Greetings Claims Leadership -- No Info On Technology

American Greetings Corporation (AM) announced better results and shocked investors into a 20% increase in value. Who knew that the greeting card industry would be a place to create wealth? Take a close look at some of the comments.

Chief Executive Officer Zev Weiss thinks that expanding their use of technology for both traditional greeting cards as well as on-line applications including Facebook and the iPhone is paying off. But no financial information is provided to back up these huge comments. So how would an investor separate fact from fiction.

They do slip in the technology risks under corporate risk factors pointing out that

“Risks pertaining specifically to AG Interactive include the viability of online advertising, subscriptions as revenue generators, the ability to adapt to rapidly changing social media, and the ability to gain a leadership position in the digital photo sharing space.”

They may have crunched out a quarter or two with better financials. But given the way they talk about their business it does not sound like they know which markets to pursue.