Well, that depends if you think that CNET, the company, is a buy.

As one of the few remaining large, independent internet media firms, CNET has for some time now been seen as a potential acquisition target.  As such, the stock has always been priced at a premium.

I owned the stock for a white, having bought into it at about $7 in 2004.  When the stock hit about $12, I sold my holdings.  The stock continued to climb over $16.  I did not exactly kick myself because I knew that in the euphoria that surrounds all things digital, CNET would always trade higher the instant a large media company, be it an old media one like News Corp. or Viacom or a new media one like Yahoo! or Google, would eye it in a potential deal.

This week, CNET tumbled 17% in a day because, unlike Yahoo! and Google, its numbers failed to impress the street.

I must say, I was intrigued to get back into it cause overall, CNET has a wonderful business, though yes, surely it could be better.

Bottom line, while I think that any transaction would only materialize if the deal was at least $2 billion, at today’s price, that implies only a 17% gain, which considering the premium the stock already trades at, means that such a return is not really worth the potential downside risk.

Of course, I also do not think that CNET CEO Shelby Bonnie would give up his company for “only” $2 billion.  He remained an independent executive for this long, why give up control now?

Time will tell.  If the company’s value were to dip below $1.5 billion (which I doubt, frankly), I’d get in, but in the $1.6-2 billion market cap range, I am not sure I’d be tempted.

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