BroadVision (BVSN) just hit a high today of $10.68 for a gain of 29% from our Monday morning suggestion price of $8.31. NIA believes that BVSN is just getting started and we have seen nothing yet. NIA considers BVSN to be the biggest steal in the market anywhere below its cash position of $12.58 per share. Considering that BVSN is in the B2B social networking business, which is one of the most rapidly growing technology spaces in the world today, we doubt BVSN will remain below it cash position of $12.58 per share for much longer. These fire-sale artificially low prices won't last!
Jive Software (JIVE) went public yesterday in one of the hottest IPOs of 2011. JIVE priced at $12 per share, well above the projected $8 to $10 pricing range and JIVE raised $161.3 million in its IPO, which was 38% more than the $117 million JIVE was expected to raise. JIVE gained 25% in its first day of trading to finish at $15.05 per share with a market cap of $887.98 million.
NIA believes that BVSN's Clearvale B2B social networking platform is a much better solution than what Jive is offering. It is absolutely insane for JIVE to be worth $887.98 million, when BVSN's market cap at $10.40 of $47 million is below BVSN's cash position of $56.79 million. This means BVSN's business is being valued by the investment community right now at less than zero.
BVSN has no debt and no legal proceedings. The only reason BVSN is currently so far below cash is because its largest institutional shareholder was a hedge fund that faced large redemptions from investors and was forced to liquidate most of their BVSN shares. This hedge fund's redemptions have created one of the greatest opportunities we have ever discovered.
BVSN is perfectly positioned in B2B social networking and cloud computing, which are expected to be the two hottest technology spaces of this decade. JIVE investors are paying 12.87 times sales for their JIVE shares when the company lost $38.1 million in the past nine months. When JIVE investors realize that instead of paying 12.87 times sales for JIVE shares, they could instead be buying BVSN for below its cash position at a valuation that values BVSN's Clearvale platform at less than zero, we believe BVSN will explode to the upside.
BVSN already has $18.45 million in sales and is only burning $5.41 million in cash on a trailing twelve month basis, just a small fraction of JIVE's burn rate. An enterprise value for BVSN of just 1 times sales would give BVSN a market cap of $75.24 million and a price of $16.65 per share.
Check out this article about BVSN from February 9th, 2000: http://www.crn.com/news/channel-programs/18833327/e-biz-stock-daily-broadvision-rises-on-stock-split.htm BVSN at the time was $164.13 per share with 82 million shares outstanding and a market cap of $13.46 BILLION.
BVSN had a couple of reverse splits after the dot-com bubble burst, which is why BVSN only has 4.52 million shares outstanding today. BVSN's CEO Dr. Chen, who was on the Forbes 500 list in 2000 as one of the richest people in America, still owns 37% of BVSN today. BVSN's public float has only 2.54 million shares. Most of BVSN's shareholders are left over from the dot-com bubble and therefore, a good part of BVSN's float is widely held by a large diversified group of shareholders who own tiny amounts of BVSN shares.
Because BVSN's float is so small yet widely held by many different shareholders, we don't think it will take much volume for BVSN to rise above its $12.58 per share cash position and onto substantially higher levels. Remember, an enterprise value of just 1 times sales would value BVSN at $16.65 per share. With JIVE's enterprise value currently over 10 times sales, NIA believes that an enterprise value of just 1 times sales for BVSN would be extremely conservative and BVSN could potentially deserve a significantly higher valuation.
BVSN has completely reinvented itself from its dot-com bubble days. BVSN has built Clearvale from the ground up, making it the best possible solution for businesses to launch separate B2B social networks for their employees, partners, and customers. Clearvale allows businesses to manage these separate B2B social networks together in one platform, while also integrating them with B2C social networks like Facebook and Twitter. Clearvale allows businesses to use their Facebook and Twitter pages to direct traffic to their Clearvale enabled customer community where they have complete control of the community and can monitor it very closely.
Almost nobody in the investment community besides us has figured out yet that BVSN's Clearvale B2B social networking platform could have even bigger potential than JIVE's B2B social networking solutions. In fact, very few people on Wall Street have even realized yet that BVSN is now perfectly positioned in the B2B social networking business. It is absolutely insane that JIVE is now worth $887.98 million after their IPO yesterday, while BVSN's business is currently being valued below zero because BVSN is trading below cash!
NIA believes that if BVSN didn't have its IPO in 1996 but instead just went public this week, BVSN would also be trading at a crazy valuation like JIVE. With Facebook expected to IPO in early 2012 with a valuation of $100 billion, we believe investors will search diligently for other social networking plays that are trading at lower valuations. In early 2012, we believe Wall Street will rediscover the new BVSN and it could have the potential to become one of the biggest percentage gainers of next year!
In B2B social networking, unlike B2C social networking, there is room for many different companies to prosper. B2B social networking is such a large and rapidly growing space that both BVSN and JIVE could both become successful along with a few other companies. In B2C social networking, everybody wants to be on one single network with all of their friends. Even if a company develops a better B2C platform than Facebook, it won't matter because Facebook has 800 million active users. While Facebook will dominate B2C social networking with a market cap of $100 billion, on the B2B side we could see a dozen or so leaders by year 2015 that each have market caps in the $1 to $3 billion range.
In our opinion, to be successful at investing you must always be well diversified. Even though BVSN is NIA's new largest holding, we have discovered 3 other stocks that we believe also have the potential to become major winners next year. NIA will soon be releasing an exclusive private report with its top 3 stock suggestions for 2012 (besides BVSN). NIA has never previously discussed any of these 3 companies and will never publicly suggest them in the future.
If you would like to learn how to receive this exclusive upcoming NIA report with our top 3 stock suggestions for 2012, please go to http://www.inflation.us/top3for2012.html and you will be added to a special email list that we will soon contact with all of the details.
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 starting from the date that NIA first suggested the company, but NIA 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
| This message was sent to blogotomat@gmail.com from: National Inflation Association | 96 Linwood Plaza #172 | Fort Lee, NJ 07024 | Email Marketing by |
| Unsubscribe | Send To a Friend |
No comments:
Post a Comment