Just because an American said Rediff.com (REDF) is overpriced, doesn't mean the world is ending

Barron's said shares of Rediff.com are overpriced last Sunday and so far this week the stock has dropped 12%.

Rediff.com India Limited (NASDAQ:REDF) is India's third-largest Web portal and the stock has been trading higher recently due to rumors of being an acquisition target for larger international rivals.

By some estimates Rediff's market capitalization is more than 13 times the entire Indian online advertising market, from which the majority of its revenues are earned (according to Barron's)

As much as I don't want to buy this stock, I wouldn't underestimate this online company that has made a name for itself and is well appreciated by its target audience.

Yea, yea, Google (GOOG) is going to take over the world, they already have, but that doesn't mean that little sites like Rediff.com won't challenge and change the landscape of the internet we know today. Yahoo (YHOO) is dying, did you think that would happen 5 even 10 years ago? Of course not. I hope Rediff.com continues to grow, now that the stock has suffered a blow, we may see a more realistic growth pattern. In May they grew Q4 revenue by 66% to $8.48 million.

More importantly their registered users grew to 53.6 million as of March 31, 2007, a 25% increase over the number of registered users as of March 31, 2006. Don't sleep on them just because some American that doesn't use the site said it's overpriced.

Article written by: Frank Lara Jr.
Article posted on: July 17th, 2007

Disclaimer: The Author does not hold any positions in REDF.