NEW YORK (TheStreet) -- Shares of Millennial Media Inc  (MM) were rallying, sharply up 27.4% to $1.86 on heavy volume in midday trading Thursday, following reports that the company is in takeover discussions with Verizon Communications Inc's (VZ) AOL.

The mobile advertising company may be acquired for about $300 million, according to TechCrunch.

Millennial Media reaches more than 670 million unique users each month worldwide, with the potential to deliver ads to more than 65,000 apps, The Wall Street Journal reports.

Since Millennial Media went public in 2012, shares have fallen more than 90%.

About 2.98 million shares of Millennial Media have exchanged hands as of 11:34 a.m. ET today, compared to its average trading volume of about 713,269 shares a day.

Baltimore, Md.-based Millennial Media is an independent mobile advertising marketplace delivering products and services to advertisers and developers.

The company offers advertisers a suite of solutions that allow them to reach and connect with the target audiences across screens, from smartphones, tablets and other mobile devices to PCs. 

Separately, TheStreet Ratings team rates MILLENNIAL MEDIA INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

"We rate MILLENNIAL MEDIA INC (MM) a SELL. This is driven by a number of negative factors, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, weak operating cash flow, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Internet Software & Services industry. The net income has significantly decreased by 52.8% when compared to the same quarter one year ago, falling from -$12.95 million to -$19.78 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Internet Software & Services industry and the overall market, MILLENNIAL MEDIA INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to -$16.15 million or 1546.19% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Looking at the price performance of MM's shares over the past 12 months, there is not much good news to report: the stock is down 64.62%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • MILLENNIAL MEDIA INC's earnings per share declined by 16.7% in the most recent quarter compared to the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, MILLENNIAL MEDIA INC reported poor results of -$1.38 versus -$0.19 in the prior year. This year, the market expects an improvement in earnings (-$0.13 versus -$1.38).
  • You can view the full analysis from the report here: MM Ratings Report