The deal indicates that consolidation in online ads is continuing even among the largest players. It puts increasing pressure on, and marginalizes, anyone who's not at least No. 2 or No. 3 in a category.
The market has been in a lateral consolidation for the last six to eight weeks, and we're seeing a continuation of that. Having broken through some technical resistance levels, it is appropriate that there has been some profit-taking. But the general trend of the market remains positive longer-term.
This consolidation really started in the mid-1990s but picked up speed and is still continuing. In the last 15 years, about 150 companies have been acquired or merged. Most of the consolidation is confined to the top 10 builders, who are acquiring companies.
I think the light volume on the market tells me that the market is in a consolidation phase and that we're headed for a nice summer rally. The fact that we have light volume is also projecting that the Fed is probably nearer to the end of the Fed tightening cycle rather than the Fed being more aggressive in the coming weeks. I think the technology stocks are going to come back strongly. And I think financial stocks are going to do well.
Consolidation has a long way to go in Napa Valley. They can triple their revenue over the next three years. The stock is not cheap but it's for someone looking for a pure-play Napa Valley wine company.