UPDATE: Bank of America Downgrades Active Network to Underperform on Investment Cycle Uncertainly

Bank of America downgraded Active Network ACTV from Buy to Underperform and reduced its price target from $19 to $9. Bank of America said, "While ACTV's leadership in the online event management space should enable it to consolidate a highly fragmented market, the company is entering a period of unforeseen marketing investment (less leverage vs. R&D or Capex in our view) with little visibility on potential returns or duration. Therefore, given potential downside profit risk from investments, decelerating organic revenue growth (8% y/y vs. 12% y/y in 2Q), and delay in synergies from StarCite/RTP acquisitions, we are moving to Underperform and lowering our PO to $9 based on 10x 2013E EBITDA of $52mn (lowered from $75mn) vs. 11x for the average internet stock." Active Network closed at $9.29 on Monday.