Saturday, February 25, 2012

National Inflation Association NIA Deceptive Practices Regarding Broadvision BVSN

A recent blast by the NIA stated that it purchased 25,000 shares of Jive Software (JIVE) to justify the valuation of Broadvision BVSN.

"JIVE currently has a market cap of $1.249 billion vs. BVSN's market cap of $161.55 million. JIVE has a net cash position of $167.51 million vs. $54.4 million for BVSN. BVSN also has legacy products that we estimate are worth $17 million. JIVE's enterprise social platform is currently receiving $1.08 billion in value vs. BVSN's enterprise social platform currently receiving $90.15 million in value. This means JIVE's social platform for businesses is receiving 12 times more value than BVSN's Clearvale."

Again the rational is that investors have to look at market cap. The argument isn't that Broadvision's legacy value has continued to decline for nearly a decade. Especially, when you look into one of its main competitors for its K2 and QuickSilver platforms. Salesforce recently reported revenue of $632 million on 38% growth year over year. While SalesForce signed over 100 customers that accounted for over $1 million in new contract and 9 customers that were $xx million in contract. These were big wins for SalesForce.

What has Broadvision done with their legacy platform? Continue to lose customers as they shift to competitors such as IBM, Oracle, and SalesForce. So how would one value Broadvision's legacy platform when its customers continue to fled? Who would want to buy an asset that has a declining value? Would you want to buy something that customers continue to fled from?

"Many investors see BVSN up big this year with their revenues in decline and the company losing money, so they decide to short the stock with the belief that BVSN must only be rising because these NIA people like the company. None of these short sellers did any research on enterprise social networking and none of them tried Clearvale for themselves."

Again, there is a reason why investors have shorted the stock. When a stock has lost all its Wall Street coverage since 2005 there is a reason why. Broadvision has went from a company with $416 million in sales a decade ago to a company that has under $20 million in sales. The NIA has not pointed out how management has failed to grow the company. And lets not forget the two reverse splits that the company had presented its shareholders.

And don't forget Broadvision had been sued by MetLife over an office lease and had previous paid $1.9 million to settle. Again mismanagement by Broadvision.

Further looking at Broadvision's miscalculation of technology:

Here's a headline from over a decade ago:

Deutsche Bank Pulls Out of Broadvision Deal

Broadvision didn't service all of their customers to the best of their ability even while they had hired thousands of employees, and also under-estimated the growth of Java. Java ended up becoming the standard which became an enormous success for corporations worldwide. This was a major blunder by Broadvision.

"The American Airlines loss was a severe blow for Broadvision but the company has addressed the issue in the US by significantly increasing the number of professional services staff. However, concerns persist. The source pointed to Broadvision's use of what is deemed an older programming language to build its software, despite the recent explosion in the use of the Java language. The danger for any end user with software written in other languages is the problems it would face if Java does become the industry norm for writing new applications.Turner believes that Java is over hyped, but the company is launching a re-architected Java version at the beginning of next year. Deutsche Bank was unavailable for comment."

With their current CEO Pehong Chen which had done nothing but caused severe shareholder losses for the past decade, this company will continue to face enormous challenges ahead and potentially future mismanagement.

I've actually tried ClearVale Express and I haven't been impressed. Broadvision isn't inventing the wheel or for this matter revolutionising the sector. ClearVale has been available in the marketplace for at least two years. ClearVale has not made notable traction against its more well capitalized competitors. Think of it this way. During the recent growth for the past ten years in technology what has Broadvision done to deserve its current valuation? Without the rights offering where would Broadvision be in terms of its cash position?

There is no justification of Broadvision running up besides the hype of the looming Facebook IPO. All stocks that have been hyped by being keyword associated with Facebook are overvalued in terms of actual revenue and profits. Broadvision has nothing to do with Facebook for the past decade. Why has Broadvision's revenue continue to decline amid this social media spring?

I do believe that there is a place for social media enterprise. However the value that corporations are willing to pay will stick with the larger companies such as Lithium. Companies such as Broadvision which has had a limited track record will disappoint investors who have seen losses of over 98% prior to the Lebed and NIA hype.

NIA does not point out to questions that it has for itself as an entity. Why is an "association" who produces YouTube videos about "hyperinflation" touting stocks saying that it will make them rich? Ethnics wise National Inflation Association created in part by Lebed really has none.

For a recap we can recall Lebed's interview with Fox Business:

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