Cello shares wallow around all time low

Shares in AIM listed Cello Group have lost 23% of their value since the start of the current year and are now at one of their lowest price points since flotation in 2004.

Last night the shares closed at 28.75p, down from 37.50p on 1 January.  The shares came to the market at 100p in November 2004 and reached a peak of 151.50p in July 2007.


In January, the company said it was in a “strong position to push for organic growth in 2010”.  However, the results for 2009 are expected to be disappointing (see Cello looks to better 2010 after disappointing loss for 2009).  The company is due to announce its results for 2009 on 16 March.

Of wider importance is the question of whether the performance of “aggregators” like Cello will recover rapidly after the current recession and, if not, whether such aggregators have a durable business model.   How can they maintain sufficient of the subliminal cultural characteristics of a first generation entrepreneurial creative business they have acquired as it transitions to a second generation of management that has no direct ownership stake in that enterprise and feels more detached from the fruits of its creative labours?   And how can the brand reputations of such aggregated businesses be maintained, let alone enhanced, without this deeper commitment?

If aggregated businesses lose momentum, the aggregators inevitably will be driven to suck in more businesses to replace them, or to aggregate among themselves.  But an aggregation of aggregators would offer little more than a palliative of scale and many would be unsure about the benefits of that.  What price shares in CelloCrestonMediaSquareMission Amalgamated Ltd?

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