SoundView Technology Group

  • About Us

Viscount Systems – putting it all together

May 27, 2014 by Kris

For the past 18 months we have written about Viscount Systems (VSYS) and their strong technology for internet-based security. Smart phones and an IT-based approach to management is what is driving change for all types of access control, including physical security. For example the newly expanded Microsoft Azure Active Directory Premium service is designed for widespread enterprise use and just became generally available.

There’s a palpable desire to finally rid buildings of proprietary, inflexible and expensive panel-based control systems. The situation is similar to the old days of proprietary telephones versus what we enjoy today with IP-based telephony.

The stock price and enterprise value of the company has expanded since the early days of our coverage but investors are still waiting for rapid revenue growth and expanding profitability.

Today we have some concrete reasons to raise or expectations for 2014 and beyond. Specifically:

1. Raised $2.4 million and is using some of this cash to build out sales and R&D/technical support teams. In the past the company has just been undercapitalized relative to the opportunity. Now they have the resources to be effective.

2. Management is now in what we would call “extreme alignment” with shareholder interest – not just equity but also compensation is directly linked to increasing revenue growth and expanding operating margins. In addition the team has a clear understanding of the consequences of needing any further capital in terms of dilution and is on a path to reach break-even by YE 2014.

3. Additional sales and support staff will help the company convert a large pipeline of qualified leads into actual sales. This has been an acute issue in the past. The new CEO Dennis Raefield was (among other things) President of Honeywell International from 1998 to 2003 and has the experience, network and experience to build the business at Viscount.

4. On the development side a major certification (Federal Identity, Credential and Access Management or FICAM) will help boost sales to the government and government agencies. It will also help the company fend off competition because certification is not simple. There are some new products in the pipeline and some refinements like exploiting PoE (Power over Ethernet) in some existing products but 2014 is about closing sales for existing products. (For more background on FICAM refer to: http://www.idmanagement.gov)

A story early this year regarding new Viscount Freedom deployments from findBIOMETRICS explains fairly clearly the market conditions that are driving the opportunity for VSYS:

“The demands of security over the past decade have been constantly driven up by an increased number of threats of all kinds, yet facilities that would be deemed as critically important still don’t have access control that could be considered in any way modern. The fact of the matter is that the cost associated with implementing an up-to-date security system is costly, especially when it involves placing a new infrastructure.

This obstacle, rather than being a hindrance, is largely the reason behind the recent spread of Viscount Systems Freedom.Today the company announced its first contract of the new year, awarded by the U.S. Federal Government, to secure facilities in California and Vermont with Freedom.

[Freedom] overcomes the obstacle described above through its Freedom Access Bridge technology, which allows authentication devices (including those that verify via biometrics) to be operated and administered through a standard IT infrastructure already in place in the buildings being secured. No installation of control panels and additional wiring means none of the associated costs that keep the unsecured feeling insecure about their choice in access control.”

Wireless ubiquity continues to spread and with it the confidence to roll out more and more critical services on networks and rely on smart devices (phones, watches, cars) to interface with the user and they systems. Developments in the industry are worth noting as well including even more ubiquitous wireless networking with both Google (with Ruckus $RKUS) and Amazon (with $GSAT) bringing their own independent wireless networks to consumers and businesses.

In all this general excitement there will be a big shift to digital authentication and access control. Our work continues to show that Viscount Systems (VSYS) is still well in the lead on the software side and almost unavoidably in the path of this growing opportunity.

An updated version of our initial coverage report can be downloaded here: Viscount Systems (VSYS) The IT Bridge to Physical Security, May 2014.

 

Filed Under: Cloud, Stocks, Technology Tagged With: advisory

Glu Mobile (GLUU) ER Marks Real Progress in Mobile Gaming

May 1, 2014 by Kris

Summary Points:

  • Glu Mobile (GLUU) reported a strong March quarter with $47M in sales (up 90% YoY) which beat consensus by $10M.
  • Guidance for the full year 2014 has been increased to between $155M and $161M but remains conservative based on commentary.
  • Acquisition of PlayFirst for about $15M adds what should be a new $10-15M+ franchise at an attractive valuation. Location and culture should also fit.
  • With a market capitalization of $325M the shares of GLUU are still at an early stage of recognition that their growing platform approach to mobile games is working.

Mobile gaming is stunningly large. It would have been great to invest in King Digital (KING) two years ago when revenues were just $100M. Now standing at $2B in revenue with a $5.4B market capitalization not so much.
But our attention was drawn to Glu Mobile (GLUU) which is focused on the same space but much smaller. Arguably Glu now has a better revenue mix and lower-risk strategy then King. Glu now has three successful games comprising the bulk of revenue rather than just one.
The stock had performed well up until the less-than-spectacular KING IPO and subsequent sharp decline in most technology and internet stocks. The “round trip” from $4 to $6 and then back to $4 on a KING IPO yawn was market noise. In the absence of the KING hype the shares of GLUU would probably have simply continued their measured rise to the $5 range.

This earnings report and commentary should set the stock up to move back to being valued on what are improving fundamentals.  We can break down the new information from the call into the following pluses and minuses:

  • Results for March were excellent. They showed a “fatter tail” to leading games like Deer Hunter and Eternity Warriors. Suggests that long-term growth will continue to improve.
  • Acquisition PlayFirst adds a franchise that generated $11M in revenues in 2013 but in decline. However a refresh and release of a known game (750M downloads) will get revenues growing again from their current run rate of $7M. The purchase price should be very accretive. 
  • New releases like Dino Hunter and new projects announced for a James Bond game and tapping the mobile market in Japan are promising. 
  • Q2 ending June will be the “nadir” of the year given the current release schedule and declines in existing games. Probably conservative guidance but it should also dampen some short-term investor enthusiasm to go out and buy the stock now. 
  • A shelf registration generates uncertainty about further acquisitions and/or dilution from additional external capital. The PlayFirst acquisition terms demonstrate management acumen but the track record isn’t yet well established.

Conclusion

For long-term investors the current risk/reward of GLUU shares looks favorable. The company has upgraded management and is taking a thoughtful and responsible approach to developing games and the company. There are other ways to play the space like KING or older companies like Electronic Arts (EA) and Activision Blizzard (ATVI) but these all already have market values from $5B to $14B.

Disclosure: We own shares of GLUU at the time of this writing. It’s been in the portfolio for some time now and we expect to be holding it for at least another year as long as fundamentals remain consistent with our expectations. As a reminder please see our important terms, conditions and disclosures.

Filed Under: Mobile, Stocks Tagged With: Gaming, Mobile, Stocks

A Good Case for Keating Capital KIPO

April 15, 2014 by Kris

We’ve known Keating Capital (KIPO) for at least two years and hold Tim Keating in high regard.  Like many potential investors we have been bamboozled by “business development companies” in terms of growth and valuation.

Look no further than this exhibit to note the spread that has opened up between KIPO NAV and the share price:

KIPO_P_NAV

Of course these companies are financial in some ways and have a calculated net present value (NPV) but some, like Keating and also Harris and Harris (TINY), invest in emerging and high growth companies. The value of their investments is growing and will fuel increases in NPV over time. Yet these companies tend to trade very close to their NPV, often at a discount. There is little if any “future value” ascribed to them. (There are exceptions to this rule as when GSV Capital (GSVC) was bid up on the Facebook (FB) IPO hype.)

We revisited KIPO the other day because we were looking into what turned out to be one of their portfolio names, Tremor Video (TRMR). We’re not sure if TRMR is going to mount a big recovery from here or not but once we started looking at the KIPO portfolio some other names boosted our interest. For example TrueCar (5.1% of KIPO net assets) has filed for an IPO. We’ve completed research on the company (link) and thing this one will add significant value to KIPO NAV as a public company.

There are other as well like Metabolon in medical diagnostics that we know well and think have a strong chance of succeeding. BrightSource Energy failed to get their IPO done but we still think that in some locations their approach to solar can be adopted. Keating has a number of other positions that touch online commerce, gaming, sustainable energy, and software.

Of course there are losers and a few very unproven companies. And as far as we can tell with respect to TRMR Keating is under water with a cost basis of  $6.67/share. However in aggregate it looks like more winners than losers and a foundation for expanding NAV and/or increased dividend distribution in future quarters.

Speaking of distributions the company has a policy to distribute gains as evenly as possible. For 2014 this means $0.10/share for the first three quarters and a final dividend based on actual results. If we assume another $0.10 for December that would be a yield of almost 7%.

The real kicker here is that NAV as of December 31st was $7.65/share and shares of KIPO are trading at $5.94.

So rather than play a potential turn around in TRMR (or MM for that matter) it probably makes more sense to take advantage of the discount to NAV that KIPO offers and accept the dividend and a potential increase in NAV as icing on the cake.

To sum up we see a stock trading at a 33% discount to NAV, with a good dividend policy and yield, run by someone we know is a very smart and capable CEO, with a portfolio of investments that we think will appreciate in the next 12 months.

KIPO may not offer the same upside as a successful turnaround at a company like TRMR but on a risk-adjusted basis is probably a better investment for many.

Filed Under: Stocks

Big Data Update – More semantic, faster clients, need for creativity

April 4, 2014 by Kris

In late March we spent two days (as usual) digging around the “big data” space with a few dozen companies and speakers at the annual GigaOM Structure Data event in NYC.

There were some encouraging trends this year, a few interesting side notes and at least one emerging question which wonders if we are missing a larger point about getting value out of all this data by maniacally storing and “processing” it. As one speaker said it “the limited business value stems from a lack of creativity and vision in understanding how to *use* data to accomplish *new and different* things.”

Our own nagging concern is that many applications require a more event-driven and real-time approach to gathering and leveraging data versus storing, staging, integrating and finally analyzing. Widespread adoption of technologies like Hadoop provokes the old saw – “when you are carrying a hammer everything looks like a nail” approach to projects.

Here are the main takeaways from the event for me:

  • There is a **concerted movement “up the stack” to deal better with semantics** and higher-order data like social connections and networks. Vendors touting speeds and feed are still around but more companies see that as the commodity that it is. Many of the companies plying this part of the data stack are private but both **Qlik (QLIK $26.16)** and recent-IPO **Varonis (VRNS $33.39)** are two companies at least touching some of the right parts of the market.
  • Data scientists are still in short supply and running projects at scale is still hard. But the **bigger governor on growth may be leaders who really “get data” as their primary method of developing business**. For example private companies like Uber and AirBnB are clearly leveraging data in a profound way relative to their competition. Another recently-public name, **Zulily (ZU $51.43)**, has implemented personalization at a whole new level by customizing web and email content dynamically at the individual user level. We expect everyone will want or need to do this soon.
  • The **need for speed is shifting from server-based processing to the client side**. It might *sound* obvious but this one is big. Your iPhone and Galaxy already have a lot of processing power, wait another few years and imagine what you’ll be carrying around. One private company, New Relic, is generalizing their application analytics to a more full stack offering and adding more “intelligence” to the feature set. It calls into question how modern the hyped **Splunk (SPLK $66.36)** platform is and whether or not they deserve their $8B market value (on $405M in estimated revenues for 2014.)
  • Subsegments like visualization from leaders like **Tableau Software (DATA $71.81)** continue to get strong interest but we remain convinced that few if any really solve the collaboration challenge in working with data and decision making. There’s still **too much “wizard” mentality in the use cases**.

Our confidence in the market needing much better “small data” tools has gone up further after this event. We know from our own recent development efforts that very valuable intelligence is available with relatively simple but highly integrative processing methods. In talking about it with others we definitely saw lights go on but all of them said they’d be unable to pursue it because it was too far from their core product which aimed more at size, scale and diversity of data.

Some of the infrastructure needed to enable these new applications is forming from a variety of slightly unlikely sources including cloud storage vendors like Dropbox, simple automation platforms like Zapier, non-relational information storage tools like MongoDB and alternative cloud-based development frameworks like Meteor.

Included here is a table showing a large portion of the “big data” ecosystem with some figures on revenues, growth and valuation.

Data_Peer_Table

Filed Under: Uncategorized

What We are Working On

March 17, 2014 by Kris

March is a busy month so far. We’ve got three different events in the process of being written up. These include one on information security, one on big data (GigaOM) and one that focuses more generally on technology and social change.

Two areas we’ve been working on including the “next wave in retail” and the “programmable web” have been in the news of late and we expect these themes to be very topical for the next 12 to 36 months. It always feels like a brave new world in the emerging technology space.

In addition to our active public investing we have started to make private investments again after a hiatus. Our direct investing is very selective due to limited capital and management bandwidth. As an experiment we are participating in some of these new “syndicates” of angel investing to understand their potential for returns and diversification for smaller investors.

Lastly we have also started developing some actual software technology that should allow us (and ultimately our clients) to have a better handle on emerging technology companies for improved decision making that tends to lead to higher returns. This work has been on the “drawing board” since 2012 and will probably take at least the rest of 2014 for there to be any kind of prototype. There’s a strong development plan behind the initial work if we can get it done and it is successful.

Filed Under: Updates

Reshaping SoundView for the Online World

February 27, 2014 by Kris

After a busy 10 years or so we have done lots of work with great clients we have continued to evolve our business since we acquired the old SoundView Trademark for use in research, analysis and investing a few years ago.

Despite all the fervor around the JOBS act and what it might mean for “boutique” investment banks and brokers, the challenges of the regular way securities business remain firmly in place. After being approached with capital we took one last in-depth look at this model before deciding to abandon it forever and stop paying attention to the throes of this large but depressing reality in our financial services economy.

We have a much more fun and fulfilling mission to complete!

 

 

 

 

Filed Under: Uncategorized

Cinedigm FY2012 Results Update

June 26, 2012 by Kris

Full-year results for FY2012, ended March, demonstrated accelerating revenue growth (+31%), improved profitability, and a “restacking” of the business to align with profitable growth opportunities in software and content.

[To see this report in PDF format (with diagrams and IV table) please use this link CIDM_FY2012_Results_Update (PDF).]

CINEDIGM (CIDM – $1.40), FY 2012 RESULTS UPDATE, JUNE 26, 2012

Kris Tuttle, kris@soundviewresearch.com, +1-617-934-1877

Fiscal Q4 was a little weaker than planned due to a few software deals slipping out of the quarter and the completion of a major acquisition (New Video) that will now serve as the foundation of the content business.

Forward guidance for the current fiscal year came in a little below where most people were thinking due to expected flattish deployment revenues and planned investments in new content to support long term revenue growth. We’ve recast our IV model and a preliminary version is included in this update.

Overall, investors saw the report as a “mixed bag” made up of strong operating results for the fiscal year with greater planned investments in the coming year to drive long-term revenue and profitability. We see it a bit differently because we expect that announcement of additional content acquisitions will drive the stock before subsequent revenue and earnings. Overall management has executed well, continues to own ~40% of the equity and is making the right long-term moves that support our current $5.62 IV estimate. Additional details are below.

EXTENDED COMMENTARY 

Software and non-deployment revenues basically doubled for FY 2012 but were flattish due to three customer acceptance delays; these are scheduled for completion in the next two quarters.

For the rest of the fiscal year we expect further development of the business in terms of new installations, business pipeline and the launching of new releases with additional functionality. Cinedigm has also hired a head of soft-ware sales and marketing to handle the growing pipeline and more fully capitalize on the global market opportunity.

Based on the market demand, product pipeline, competitive positioning and management focus we expect the software growth rate to be sustainable for the next two fiscal years. By then we also expect a meaningful portion of the software revenues to be cloud-based and using the SaaS delivery and business model. Overall, we expect the growth and profitability of the software group to be the star in the medium-term while the content business ramps up.

Turning to content business, the acquisition of New Video (NV) has already led to a number of notable content acquisitions targeted to avid audiences in theaters and subsequently downstream to mobile devices, televisions and laptops through online content providers (iTunes, Netflix, Amazon.com, etc.)

For the first time the company mapped out some details of their New Video content strategy. The company is in-vesting in new content during the F2013 fiscal year, which means acquisition and related costs will impact the P&L before revenues begin to kick in. Cinedigm FY 2012 Results Update June 26, 2012 2

In essence, the company will be taking a data and business model driven approach to licensing and distributing content that represents a de-risking of the digital content market. Management likes to describe this as the “Mon-eyball approach” to the content industry. For those not familiar with the book and movie by the same name, it shuns gut feelings, big names, ego and other adverse selection criteria in favor of an analytical, results-focused ap-proach that is geared to optimizing returns.

That doesn’t mean that the content doesn’t have to be good. The New Video acquisition puts the company at the nexus between a plethora of independent content providers and the massive global but fragmented audience of consumers.1

1 For more background on the acquisition see: Cinedigm’s Acquisition into Content and Distribution, April 23, 2012. http://blog.research2zero.com/2012/04/cinedigms-acquisition-into-content-and-distribution/

As an investor, this means that Cinedigm provides “last dollar in, first dollar out” capital. They also receive a 25% distribution fee and up to 20% of back-end profits after all fees and expenses. However, these fa-vorable investment terms won’t show up in revenues and profits until after newly-licensed content gets into the release schedule.

The graph here illustrates the dynamics starting in the quarter before release. Up-front marketing costs must be expensed as incurred in ad-vance of revenue. As the film goes through release and then down-stream monetization the expenses are recovered and period losses turn into period profits, which eventually result in a cumulative gain that benefits some from long-tail demand.

Each release will vary considerably in terms of details but the overall shape of the business will be the same: pre-release marketing and other expenses incurred and reported, followed by revenues. After a year results will be steady enough to offset upfront investments so the P&L will become more balanced.

VALUATION 

The balance sheet and reporting structure of Cinedigm make it hard for some investors to understand valuation, but the business has been simplified and today it is much easier to understand. We deconstruct EBITDA for all the companies we follow anyway. Most management teams find the notion of “adjusted EBITDA” appealing but it must be parsed and reclassified for use in any sensible intrinsic valuation (IV) model.

In the case of Cinedigm we include all (core and non-recourse debt) interest expenses but exclude depreciation. On the side of the balance sheet we include only core debt as part of the total capitalization of the company. Ap-plying this to the IV model using a10x earnings multiple we arrive at our IV of $5.62. We’d also note that the “period share price” that measures purely current numbers comes to $3.00, also well above the current share price of $1.40.

Just for fun we ran a version of the IV model with the non-recourse debt included in the total. It drops the IV substantially but it still comes out to $3.65 per share using a 10x multiple. Cinedigm FY 2012 Results Update June 26, 2012 3

CONCLUSION 

Cinedigm has come a long, long way in just over a year and has entered a new phase of growth. Because they are blazing a new trail in terms of theatrical content in a digital world it’s going to take a little time for investors to embrace the business, but we expect that as more top flight content comes to the big screen from Cinedigm with all the little screens following right behind, people will begin to take notice.

We will be covering the newly digital world of cinema more completely in our next basic report on the company.

Meanwhile, the upside in the shares provides a strong incentive to put some patient money to work in this name.

Filed Under: Entertainment, Stocks Tagged With: cidm, imax, nflx, rld

Digesting the Vringo Markman Hearing

June 19, 2012 by Kris

[Warning label – I am not a lawyer and have no specific information about this case. In fact I’m really not qualified to write about it. But that seems to stop nobody these days. 😉 I also don’t have any positions in any of the stocks mentioned here.]

The awaited results of the Vringo “Markman” hearing rippled through the market in the last day or so as Vringo stock ($VRNG) started to rise again. Since this is such a high stakes soap opera I decided to take a little time to go through the courts “Memorandum Opinion and Order” which was filed with the SEC by the company. It’s already said that the result was a win for Vringo with a score of 4-2 but I wanted to know more.

First of all some bad news for followers of this saga – the 23 page document is concerned with the meanings of terms and the construction of claims. That means that it’s a long and nuanced discussion of what specific terms like “a scanning system” actually mean down to minutia is scanning through information or merely scanning across a network. My summary and analysis follows but if you really want to get the full effect you should read the full document.

So what’s with deal with “terms?” As you’ll see in the analysis the legal definition of what terms mean can play a pivotal role in determining whether or not there is actually infringement. For example let’s say I patented step-by-step instructions with a specific order to whiten teeth. If someone used these instructions but in a different order I would have a hard time asserting infringement since my patent covers a specific order. It’s not black and white but you get the idea.

The Arguments

There were four undisputed terms included “informon” (a unit of information), “user” (thank goodness!), “relevance to the query” (how well the information satisfies) and “query” (request for search results.)

There were six disputed terms:
[s2If !is_user_logged_in()]
Please login (registration is free) to see the rest.
[/s2If]
[s2If is_user_logged_in()]

“collaborative feedback data” – The sticking point on this one is that defendants wanted this term to apply to the data about what information was most relevant rather than the information itself. The court however focused on the notion of whether or not the users are required to have “similar interests or needs.” The ruling was that the term pertains simply to users and they are there is no requirement for “similar interests or needs.”

“feedback system for receiving information found to be relevant to the query by other users” – Similar to the above the defendants argued for the notion of users with “similar interests or need” and again the judge ruled that there was no language in the claim to support this meaning.

“scanning a network” – The point here has to do with whether scanning is the same as “spidering” or “crawling” the network. Although we can appreciate some confusion over the notion of scanning and spidering it’s not clear how the outcome of this ruling would impact the case. The judge went for the simplest ruling which is that this term can have multiple meanings that include spidering but that ther definition of the term should remain “looking for or examining items in a network.”

“a scanning system” – The dispute here centers on whether the scanning goes on over a network to retrieve the information or goes on though the information to determine relevance. This was also an attempt by the defendants to roll back some of the improved language in the newer patent claim. It failed however and the judge went with the definition of a scanning system as “a system used to search for information.”

“demand search” – Here the defendants argued for the meeting to be more specific as “a search engine query.” There is also a disputed notion around whether a demand search can be persistent and continue to occur for a long time or whether it is a kind of “one shot deal.” The court ruled that this term is more of the one shot variety with the definition “a single search engine query performed upon a user request.”

“Order of Steps” – As hinted at above a specific order requirement might make infringement harder to prove. In this case the court broke things down by patent (the ‘420 and the ‘664) and particular steps. In the case of the four steps in the ‘420 patent the court ruled that “scanning” had to come before “receiving” information. For the ‘664 patent the decision was that “searching for” and “receiving information” must precede “combining.” The specific steps are outlined in the document but that’s the gist of it.

So what does that all mean?

Qualitatively the set of rulings were more favorable to Vringo and less so to the defendants. That doesn’t mean that it’s conclusive. But it does help. As can be seen in the ruling the defense strategy is typically to create increased specificity around terms and thus terms to either defend against any infringement at all or reduce potential damages.

Although there isn’t much room for the defendants there might still be a little. I’d say it would have to hinge on going after the timing and the mechanism of steps that Google uses versus what is in the patents, specifically the notions of “demand search” and “Order of Steps.”

But this case involves multiple defendants (AOL, Google, IAC, Gannett and Target) who all may have greater or lesser arguments for their approaches being different relative to their mechanisms of action. So even if Google might have a decent defense it doesn’t follow that it would apply to the others.

And the stock?

Well the traders are already pushing it higher (again). However the company has a complex (204 page!) document outlining the proposed merger terms with Innovate/Protect. They have a shareholder meeting scheduled for July 12th to approve the merger and additional business.

The merger includes a share exchange whereby the owners of Innovate/Protect will own jut over 56% of the outstanding common stock of the combined company. One concern that has been voiced in the market is the dilution in the stock following the merger and the uncertainty around just how many future shares will be outstanding.

This isn’t a time to roll out the spreadsheet just yet. That’s because if the lawsuit is successful the amounts at stake will be large even compared to a much expanded VRNG company value. For example some very simple back-of-the envelope math using the recent purchase by Mark Cuban and a quick review of the merger terms suggests an effective capitalization figure of something like $200M (versus the quoted $56M cap.) That is a big step up but one that remains small in relation to the stakes.

There is also a legitimate carrier-focused business model inside the company that we continue to believe can be a source of value but it’s lost in the weeds here.

Probably the biggest caution we have is the out-of-left-field ruling we saw recently in the Apple-Samsung case where the judge essentially ruled against the growing absurdity of the patent system. Although profound it’s not a defense that can be planned or counted on so it may not impact potential settlements.

[/s2If]

Further Reading:

If you haven’t seen it the original match to the flame came on March 31st with this post by James Altucher on TechCrunch: Why Google Might Be Going to $0

There are more links to this so please share in comments if you have them and they will be added.

 

Filed Under: Internet, QuickTakes, Stocks Tagged With: patents, VRNG

Constant Contact Continues to Confuse

June 13, 2012 by Kris

We know the insides and outs of email marketing and even online social networking for business but have always failed to grasp Constant Contact (CTCT – $16).

Even after meeting with the company management we only came away with “we do what we do very simply with lots of hand holding for one and two person companies without any technology skills.” This was enough to describe the company but hardly an exciting investment.

By way of context we first talked about the stock as a short back in October of 2007 at $24 and published a fuller note on the company with a $14 IV estimate in February of 2008. Most of what we put forward in that research report remains true but acquisitions, especially the recent purchase of SinglePlatform, have blurred the picture more. We’ve uploaded the report and here is the link (PDF): Constant Contact CTCT Update February 2008

Constant Contact has tried to move into more areas like event management and social networking to provide additional offerings to their existing base of users. They’ve made some acquisitions to accomplish this but have not made any traction at all outside of their existing base of users. These acquisitions may not have moved the needle much (like NutShellMail) but they were fairly harmless.

Spending $100M for an also-ran in the online restaurant menu and promotion space is not good. (It’s true they are working to generalize their product but it’s mostly shown in the marketing and not the market. The number of employees is rather small and only about $5M has been invested in the company. That’s one hell of a premium. If CTCT had acquired this company for $15-20M I think we’d all give management the benefit of the doubt and at least give them credit for being a disciplined buyer. But that’s not the case here.

We also note that there are larger and more successful private companies (like www.yext.com) in this space.

Not everyone out there follows our Twitter stream so may have missed a quote we took from an online forum on email marketing where experts expressed the fact that “you probably won’t go wrong in choosing any leading platform from Mailchimp to Aweber as long as you don’t end up with Constant Contact.”

Their message is still that they are not trying to impress anyone who is technically savvy but in this world of “consumer driven IT” that strategy is not working. Consumers and their generally available technologies just keep getting better.

And alongside it all CTCT keeps looking clunkier.

[No investment position.]

Filed Under: Cloud, Markets, QuickTakes, Stocks

Information Security – StrikeForce Update

June 5, 2012 by Kris

Today we published an update on StrikeForce Technologies outlining what has been consistent progress over the last several months during a time when security breaches remain routine despite elevated spending levels on improved technologies and services.

In summary the company has improved their direct sales while developing a network of channel partners, distributors and resellers that are helping to grow sales of which is recurring (70%+).

We acknowledge that the company needs to restructure the balance sheet and build a stable long-term shareholder base. In the meantime though management continues to build value in the company that we expect will be recognized over time, possibly by strategic partners if not investors.

Please refer to the report for more: StrikeForce Update June 5, 2012

Filed Under: Stocks

  • « Previous Page
  • 1
  • 2
  • 3
  • 4
  • …
  • 42
  • Next Page »

SoundView Advisory

About Us

Our specialties: We start at a thematic level - everything needs to fit into a long-term trend.

Copyright © 2021 · Agency Pro on Genesis Framework · WordPress · Log in