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Saturday, April 14, 2012
NIA Fluff Piece on Broadvision BVSN
With the recent pending IPO of Facebook the National Inflation Association has started its tout job of Broadvision (BVSN).
"BVSN's current market cap at $26.62 is only $122.45 million. After subtractingBVSN's $54.4 million in cash and $17 million in value for their legacy products,BVSN's Clearvale enterprise social platform is currently worth an insanely low $51.05 million.NIA believes thatBVSNat only $26.62 per share is by far the biggest opportunity in the market today!"
What the NIA hasn't disclosed is that Broadvision continues to burn through its cash quarter after quarter. Only through a rights offering did Broadvision stem the bleeding of its cash. With only one potential viable product in Clearvale they have to offset Quicksilver and K2 product lines (legacy products) which customers continue to leave in droves. Who would pay $17 million or more for a product that the enterprise has not seen as a viable solution in over a decade, the last time of which Broadvision was actually growing. For a decade the CEO has been collecting his annual salary while shareholders were shafted.
"Facebook has $3.71 billion in revenues and is expected to go public with a valuation of $100 billion, which equals 27 times sales. IfBVSNgenerates just $64 million in annual revenues and is worth 27 times sales,BVSNwould be worth $1.728 billion and with 4.6 million shares outstanding it would equal a share price forBVSNof $375.65. Imagine ifBVSNcaptures a 10% market share! Even with a more conservative price/sales ratio of 10, a 10% market share could mean $640 million in annual revenues, a market cap of $6.4 billion, and a share price of $1,391.30!"
Again NIA with its nonsense. To compare Facebook and Broadvision is like comparing gold to cooper. For the past decade while Facebook was growing and adding users Broadvision annual losses and declining revenue continues to pile up. The next thing you know is that the NIA will compare Broadvision to Salesforce because they both have an app on iTunes. Clearly these companies are different since Broadvision hasn't seen the light besides this extended tout by the NIA and Lebed.
"BVSNcould potentially become the Facebook of enterprise social networking. WhileBVSNsigned 33 new customers last quarter,JIVEonly grew by 10 new customers. In fact,JIVEneeded to spend $13 million on marketing last quarter to grow by 10 customers.BVSNonly spent $1.5 million on marketing last quarter and achieved much larger customer growth!"
What the NIA doesn't state is how many of these customers are actually paying customers rather than just customers who have been using the free edition of ClearVale. What is the actual rate that is actually willing to convert from free to paying customers? And what is the average billing rate for these customers?
Again, in its recent number of touts the NIA has FAILED to mention that the CFO of Broadvision has filed to sell 180,000+ shares. For its mention that short sellers are actting like vultures over BVSN might be a bit overstated since additional shares will be on the market courtesy of the CFO. Another fact that NIA hasn't mentioned is why it had sold shares within the last two months when they are touting figures into 2016. Wouldn't you think that with Broadvision supposedly growing gangbusters in the future that everyone should be holding their shares and people should be selling their homes for this gold mine?