New NIA Stock Suggestion

NIA already owns a large position in its new stock suggestion. We normally don't publicly suggest a stock that we already own a large position in, but this stock is currently trading for well below its cash position and we consider it to be one of the biggest steals in the market today. Please see our disclaimer at the bottom of this email for information on the amount of shares we own, our purchase price, and the holding period we have agreed to.

 

BroadVision, Inc. (BVSN)
Currently: $8.31
http://www.broadvision.com
 
There is a major company that is currently scheduled to have its IPO this week, Jive Software. Goldman Sachs and Morgan Stanley are leading the IPO of Jive. Jive is a leader in social networking solutions for businesses. Jive is expected to raise $117 million in the IPO and trade at a valuation of $573 million or 8.3 times Jive's sales of $69 million.

 

NIA's largest holding at this time and our new stock suggestion is a company that is in exactly the same business as Jive and is one of Jive's major competitors. The company is Broadvision (BVSN) and it also provides social networking services for businesses. NIA considers BVSN to be one of the most undervalued stocks in the world today because its B2B social networking software business is currently being valued at less than zero.

 

BVSN at its current price of $8.31 with 4.52 million shares outstanding has a market cap of only $37.56 million. BVSN is sitting on $56.79 million in cash with no debt. BVSN's cash position currently equals $12.56 per share. BVSN needs to rise over 50% in price just to reach its cash position.

 

Jive Software is losing a lot of money and reported a loss of $38.1 million in the first nine months of this year. BVSN's net loss in the last nine months was only $3.57 million. BVSN is burning substantially less cash than Jive and with BVSN's cash burn rate of $5.41 million in the most recent twelve months, BVSN has enough cash to last for 10 1/2 years.

 

If Jive raises $117 million and trades with a market cap of $573 million like expected, Jive's actual business will be worth $456 million or 6.61 times revenues of $69 million. If BVSN was worth 6.61 times its revenues of $18.45 million on top of BVSN's cash position of $56.79 million, BVSN would be worth $178.74 million or about $39.54 per share. Even an enterprise value for BVSN of just 3 times revenues would value BVSN at about $24.81 per share.

 

90% of current spending on social CRM is for B2C use, but spending on B2B sCRM is growing faster than B2C, and is projected to account for 30% of the market by 2015. BVSN's clients include Baker Hughes, BlueCross/BlueShield, Canon, ClubMed, EFG Bank, Epson America, Fiat, GexPro, Hilti, Honeywell, Iberia, Indian Railways Catering and Tourism Company, Lockheed Martin, Oreck Corporation, PETCO, Siemens, SINA, Sony, Thomas Cook (India) Ltd, U.S. Navy, Verifone, Vodafone, Xerox and more.

 

Check out this article just released today about the Jive Software IPO coming this week: http://seekingalpha.com/article/313282-the-ipo-buzz-hottest-ipo-week-of-the-year It says that Jive is expected to be a "hot issue". In our opinion, it is only a matter of time before the investment community realizes that BVSN is the biggest opportunity in social networking for businesses. BVSN's Clearvale could be a better solution that what Jive offers and BVSN is trading for below cash, while Jive is expected to trade with a market cap that is 8.3 times sales.

 

BVSN has been in business since 1993. BVSN's split adjusted high during the dot-com bubble was about $20,000 per share. BVSN's CEO is still Dr. Pehong Chen, who founded the company. Dr. Chen is also on the Board of Directors of Sina.com, the largest Internet portal in China.  Dr. Chen previously founded Gain Technology, which was acquired by Sybase in 1992 for over $100 million. Dr. Chen also provided the start-up funding for Siebel Systems, which was acquired by Oracle for $5.8 billion.

 

Disclaimer: NIA owns 122,000 shares of BVSN that it purchased at an average price of $8.6687 per share. NIA has agreed to a 60 day holding period on these shares but intends to sell its shares at some point in the future after the date of February 12th, 2012. NIA's co-founders have also been referred business in the past from somebody who has filed as a large BVSN shareholder.

 

NIA is not an investment advisor. This email is not a solicitation or recommendation to buy, sell, or hold securities. Never make investment decisions based on anything NIA says. This email is meant for informational and educational purposes only and does not provide investment advice. NIA's co-founders have previously disseminated information about BVSN in other media outlets.

 

Additional legal disclaimer information: http://inflation.us/legaldisclaimer.html

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