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Tickers in this Article: MAMA, CNIC, GOOG, TWX, YHOO

Internet search provider Mamma.com (formerly Nasdaq: MAMA) found a way to temporarily wreck its stock price recently without offering up a single gloomy financial number.

Earlier this month, the company decided that a name change to Copernic, Inc. and a new ticker (Nasdaq: CNIC) might be a good way to create a little buzz. It certainly created a buzz... the wrong kind. Shares dropped from around $4 to about $2.90 on the news. The company now has a new "corporate image" and web site ( http://www.copernic.com/corporate/ ), but if Mamma.com isn't a cult stock, then I don't know what is.

Spooking Investors
The reason is for the sudden drop is fairly simple. Shareholders in micro-cap stocks invest in companies they know are full hype and promise, and they hate it when they walk in one day and find the stock has changed like this.

The truth is that most investors do not follow these names every single hour of a day, and it spooks smaller investors when they see a name and a ticker change. It's similar to when investors can't find a Nasdaq ticker because the four-letter ticker has added an "E" or a "D".

Most people figure out pretty quickly that the company hasn't gone bust, but that first scared reaction is often an issue. Not that long ago investors saw implosions every few days at the end of the tech-bubble.

What Felt Bad Might Actually Be Good
While this would scare many investors, and while the Copernic's history of "alliances" and "contracts" is more subject than financial substance, nothing has really changed here. The company still has the same deals in place and is still the same basic company compared to last week. Its various "Mamma units" are still in there. It would seem the company was simply trying to give itself a more grown-up appearance. It's hard to blame the company for wanting to make that change.

The Known Negatives
The officers that resigned in January 2007 have also been a known event for some time. The SEC inquiry and investigation from 2004 and the settlement-pending class action suit are also known events.

The company is also very subject to changes or loss of its large contracts, and it is never known what the financial term of any real contract is. The Nasdaq confirms the financial data: it is a very volatile stock with a $0.86 to $8.60 trading range over the last 52-weeks, and it is a true micro-cap, worth $38.2 million.

There are some interesting figures from the financials given last month: It has more than 175 publishers or advertisers to use, 93% of revenue comes from search, and the company has changed accounting standards in Canada. Revenue is still quite small at $2.642 million last quarter. And four major customers account for more than 10% each, for a total of 61%. In the quarter, it posted a loss of $1.38 million from operations.


Ultimately, Good or Bad?

At first glance, it is easy to worry that the wheels are coming off the cart. But, it now appears the company is trying to move away from quite a silly name. It is going to take some time, and the company is highly at risk with any single contract.

It will probably never grow into an online powerhouse such as Google (Nasdaq: GOOG), Yahoo! (Nasdaq: YHOO) or Time Warner's (NYSE: TWX) AOL. However, if history is any judge, it probably won't be too much longer before the company starts making new contract announcements (or expanded existing contracts).

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