We would like to explain why our brand new stock suggestion BroadVision (BVSN) is our new largest position even though it has almost nothing to do with inflation. Very rarely do we invest into technology stocks and we almost never invest into technology stocks that develop software. However, NIA considers the current boom in social networking to be too big to pass up. Facebook is expected to IPO next year at a valuation of $100 billion. BVSN's main competitor Jive Software is having its IPO today and it has the potential to be the hottest IPO that Wall Street has seen all year.
With Jive Software expected to start trading today with a market cap of $708 million or 10.26 times sales, we believe Wall Street will look for undervalued alternatives. NIA likes BVSN's B2B social networking platform better than Jive and BVSN is trading for below cash. This means BVSN's social networking technology is currently receiving no value at all and won't be receiving any value until BVSN rises to above $12.58 per share!
NIA will be very surprised if BVSN doesn't at least rise back to its cash position of $12.58 per share in the near-future! BVSN was last at $12.58 in July, but it is our understanding that BVSN's largest private shareholder, a hedge fund Palo Alto Investors, LLC, faced redemptions in recent months and was forced to sell a large amount of their shares. This is what we believe drove BVSN's share price down to insanely undervalued fire-sale prices that we doubt will last for much longer!
NIA believes that no stock that is debt free with a burn rate that is only 1/10 of their cash position, deserves to be trading below cash! In our opinion, this especially holds true for a company that has been in business for 18 years with a well respected management team that has positioned the company perfectly in the rapidly growing B2B social networking industry!
BVSN has been in business since 1993 and was one of the darlings during the dot-com bubble. With BVSN's main competitor Jive Software having its IPO today and Facebook expected to have its IPO in 2012, we believe BVSN is about to become a darling once again during this new era of social networking and cloud computing.
First of all, we consider BVSN to be a steal here without giving it any value at all for its business. BVSN has about $12.58 per share in cash and no debt. BVSN needs to rise to above $12.58 per share just for its market cap to equal the amount of cash it has on its balance sheet. We see almost no downside risk at $9.22 because BVSN is trading for well below cash and has enough cash to last for 10 1/2 years at its current trailing twelve month burn rate.
It was just announced late last night that BVSN's main competitor Jive Software has raised $161.3 million in its IPO and will begin trading today under the symbol JIVE. This is 38% more than the $117 million they were expected to raise. This proves just how hot the B2B social networking space is. They were originally expected to offer 11.7 million shares to the public at $10 per share, but Jive ended up selling 13.4 million shares at $12 per share. Not only was there demand for Jive to sell 15% more shares than projected, but the IPO priced 20% above the high end of the original $8 to $10 pricing range.
NIA believes that BVSN's Clearvale platform has the potential to become one of the leading solutions in B2B social networking. B2B currently makes up only 10% of the social networking industry while B2C sites like Facebook and Twitter make up 90% of the industry. However, businesses are rapidly starting to realize that when they direct their clients to visit their Facebook and Twitter pages, they are throwing away their own traffic and making the owners of Facebook and Twitter very wealthy. B2B social networking is now growing much more rapidly than B2C social networking, with B2B social networking expected to reach a 30% share of the social networking industry by 2015.
The future of the Internet will have businesses implementing their own social networks using platforms like BVSN's Clearvale. This isn't downplaying the very important roles of Facebook and Twitter. The reality is, Facebook and Twitter do create a lot of traffic for businesses. BVSN realizes this, which is why their Clearvale platform integrates the B2B social network of a business together with Facebook and Twitter.
Many organizations today already have both enterprise social networking tools and external facing social networks on Facebook and Twitter, but very few organizations have integrated them together. BVSN's Clearvale addresses this issue and takes full advantage of the two biggest technology trends on the Internet today, the emergence of cloud computing and the moving of social networking from the web to the enterprise.
Check out this graphic below to see how BVSN's Clearvale allows businesses to create separate social networks for each group of people related to their business, while allowing them to manage these networks as an integrated system:
First of all, we consider BVSN to be a steal here without giving it any value at all for its business. BVSN has about $12.58 per share in cash and no debt. BVSN needs to rise to above $12.58 per share just for its market cap to equal the amount of cash it has on its balance sheet. We see almost no downside risk at $9.22 because BVSN is trading for well below cash and has enough cash to last for 10 1/2 years at its current trailing twelve month burn rate.
It was just announced late last night that BVSN's main competitor Jive Software has raised $161.3 million in its IPO and will begin trading today under the symbol JIVE. This is 38% more than the $117 million they were expected to raise. This proves just how hot the B2B social networking space is. They were originally expected to offer 11.7 million shares to the public at $10 per share, but Jive ended up selling 13.4 million shares at $12 per share. Not only was there demand for Jive to sell 15% more shares than projected, but the IPO priced 20% above the high end of the original $8 to $10 pricing range.
NIA believes that BVSN's Clearvale platform has the potential to become one of the leading solutions in B2B social networking. B2B currently makes up only 10% of the social networking industry while B2C sites like Facebook and Twitter make up 90% of the industry. However, businesses are rapidly starting to realize that when they direct their clients to visit their Facebook and Twitter pages, they are throwing away their own traffic and making the owners of Facebook and Twitter very wealthy. B2B social networking is now growing much more rapidly than B2C social networking, with B2B social networking expected to reach a 30% share of the social networking industry by 2015.
The future of the Internet will have businesses implementing their own social networks using platforms like BVSN's Clearvale. This isn't downplaying the very important roles of Facebook and Twitter. The reality is, Facebook and Twitter do create a lot of traffic for businesses. BVSN realizes this, which is why their Clearvale platform integrates the B2B social network of a business together with Facebook and Twitter.
Many organizations today already have both enterprise social networking tools and external facing social networks on Facebook and Twitter, but very few organizations have integrated them together. BVSN's Clearvale addresses this issue and takes full advantage of the two biggest technology trends on the Internet today, the emergence of cloud computing and the moving of social networking from the web to the enterprise.
Check out this graphic below to see how BVSN's Clearvale allows businesses to create separate social networks for each group of people related to their business, while allowing them to manage these networks as an integrated system:
BVSN's Clearvale allows businesses to provide separate networks for employees, partners, and customers, while integrating them with public social networks like Facebook and Twitter. This allows businesses to keep their Facebook and Twitter pages while using them to direct traffic to their Clearvale enabled customer community where they have complete control of the community and can monitor it very closely. Instead of businesses creating value for Facebook and Twitter, BVSN allows them to create value for themselves! BVSN uses a pay-per-user pricing platform so the larger a company's network becomes, the larger the revenues BVSN generates!
BVSN has added into Clearvale all of the features that make social networks social including blogs, polls, calendars/events, tasks, forums, activity streams, wikis, LDAP, bookmarking, communities, and more. Clearvale allows businesses to provide different functions for the separate employee, partner, and customer communities, to meet the needs of each of these groups.
Check out this sample Clearvale social network screen shot to see some of the amazing functions that BVSN allows businesses to include in their B2B social networks:
BVSN has added into Clearvale all of the features that make social networks social including blogs, polls, calendars/events, tasks, forums, activity streams, wikis, LDAP, bookmarking, communities, and more. Clearvale allows businesses to provide different functions for the separate employee, partner, and customer communities, to meet the needs of each of these groups.
Check out this sample Clearvale social network screen shot to see some of the amazing functions that BVSN allows businesses to include in their B2B social networks:
Jive will now have about 59 million shares outstanding when it starts trading today at $12 per share. That will equal a market cap of $708 million. Jive's current revenues are only $69 million, which means Jive will start trading with a price/sales ratio of 10.26. This shows the huge premiums Wall Street is willing to pay for companies in this rapidly growing industry!
BVSN currently has revenues of $18.45 million. BVSN only has 4,515,855 shares outstanding and BVSN's CEO Dr. Pehong Chen owns 1,663,175 or 37% of the company. This means Dr. Chen is motivated to create shareholder value and his interests are aligned with BVSN's shareholders. BVSN's market cap at $9.22 is only $41.636 million when BVSN has $56.787 million in cash and no debt.
BVSN's current price/sales ratio is 2.26, compared to Jive's price/sales ratio of 10.26. This doesn't even begin to show how undervalued BVSN is because BVSN is trading below cash and its business in reality is being valued at less than zero!
If BVSN's actual business was valued at 2 times BVSN's $18.45 million in sales, BVSN would have an enterprise value of $36.9 million. If added to BVSN's cash position of $56.787 million, BVSN would deserve a market cap of $93.687 million and a share price of $20.75.
If you divide $56.787 million by 4,515,855 you get a cash per share value for BVSN of $12.58. BVSN needs to rise 36% from its current price of $9.22 just to reach its cash position of $12.58 per share! Only once BVSN rises above $12.58 will its business be receiving any value at all! NIA considers BVSN to be perfectly positioned in what will be the hottest technology spaces of the decade, social networking and cloud computing! Certainly, BVSN's business deserves a very substantial valuation!
BVSN is currently burning $5.41 million in cash on a trailing twelve month basis, but with the explosive growth that is projected to take place in B2B social networking with the B2B share of the social networking industry expected to grow from 10% today to 30% in 2015, we believe BVSN has the potential to once again become extremely profitable by mid-decade. The cash that BVSN is burning is very small compared to the cash Jive is currently burning. Jive lost $38.1 million in just the first nine months of this year! For Jive to be losing 15 times more than BVSN and for Jive to start trading today with a market cap of $708 million when BVSN is trading well below its cash position is complete insanity!
Wall Street seems to have completely forgotten about BVSN since its darling days during the dot-com bubble in 1999 when it reached a split adjusted high of about $20,000 per share. It is because of BVSN's brilliant CEO Dr. Pehong Chen that BVSN survived the dot-com bust and has managed to completely reinvent itself today and position itself perfectly in the new dot-com 2.0 era. Remember, Sina.com the largest Internet portal in China with a market cap of $3.85 billion, has Dr. Chen on their Board of Directors. This proves how much respect Dr. Chen commands around the world. The last company Dr. Chen founded Gain Technology was acquired by Sybase for over $100 million and Dr. Chen previously provided the start-up capital 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
BVSN currently has revenues of $18.45 million. BVSN only has 4,515,855 shares outstanding and BVSN's CEO Dr. Pehong Chen owns 1,663,175 or 37% of the company. This means Dr. Chen is motivated to create shareholder value and his interests are aligned with BVSN's shareholders. BVSN's market cap at $9.22 is only $41.636 million when BVSN has $56.787 million in cash and no debt.
BVSN's current price/sales ratio is 2.26, compared to Jive's price/sales ratio of 10.26. This doesn't even begin to show how undervalued BVSN is because BVSN is trading below cash and its business in reality is being valued at less than zero!
If BVSN's actual business was valued at 2 times BVSN's $18.45 million in sales, BVSN would have an enterprise value of $36.9 million. If added to BVSN's cash position of $56.787 million, BVSN would deserve a market cap of $93.687 million and a share price of $20.75.
If you divide $56.787 million by 4,515,855 you get a cash per share value for BVSN of $12.58. BVSN needs to rise 36% from its current price of $9.22 just to reach its cash position of $12.58 per share! Only once BVSN rises above $12.58 will its business be receiving any value at all! NIA considers BVSN to be perfectly positioned in what will be the hottest technology spaces of the decade, social networking and cloud computing! Certainly, BVSN's business deserves a very substantial valuation!
BVSN is currently burning $5.41 million in cash on a trailing twelve month basis, but with the explosive growth that is projected to take place in B2B social networking with the B2B share of the social networking industry expected to grow from 10% today to 30% in 2015, we believe BVSN has the potential to once again become extremely profitable by mid-decade. The cash that BVSN is burning is very small compared to the cash Jive is currently burning. Jive lost $38.1 million in just the first nine months of this year! For Jive to be losing 15 times more than BVSN and for Jive to start trading today with a market cap of $708 million when BVSN is trading well below its cash position is complete insanity!
Wall Street seems to have completely forgotten about BVSN since its darling days during the dot-com bubble in 1999 when it reached a split adjusted high of about $20,000 per share. It is because of BVSN's brilliant CEO Dr. Pehong Chen that BVSN survived the dot-com bust and has managed to completely reinvent itself today and position itself perfectly in the new dot-com 2.0 era. Remember, Sina.com the largest Internet portal in China with a market cap of $3.85 billion, has Dr. Chen on their Board of Directors. This proves how much respect Dr. Chen commands around the world. The last company Dr. Chen founded Gain Technology was acquired by Sybase for over $100 million and Dr. Chen previously provided the start-up capital 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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