I was about to stop looking at TCN as an investment but recent news around Statseeker and Urgent is interesting. Think I will hold off a decision at the moment but any thoughts on the below observations would be welcome. At 8 cents it might be a good buy if we are on the brink of something exciting....
Statseeker:
- With the US office opening should we expect to see Management put on a large number of sales and pre-sales staff to drive growth. That seems to be the industry trend but there is nothing on the job boards. Can Statseeker afford it without borrowing more cash from the shareholders given their reduced reserves after paying bank debt of the sale?
- Statseeker Inc and the US Head office were established in June last year - but they are only getting office space now ....this seems a little overdue since the company CEO has been based in the US (working from home?) since Jan 2015. Does anyone know how many people are in Statseeker and where they are located?
- Someone posted earlier about a local competitor - AKiPS - after reading their site it looks like the creator of Statseeker started it and it does everything Statseeker does.... and more. Does anyone know about them?
- There is a lot of exciting investment from US VC's into this space and this alone might be enough to tempt me in. Perhaps this is the exit NBC/Questra is looking for:
---->SevOne is backed by Bain and took $200million over 2 hits. They grew by 100+%YonY before that;
---->Science Logic took $40million D round funding and grew from $30m to $100m Revenue last year alone
---->NetBrain took $40million and has put on a massive sales team
---->Solarwinds sold to Thoma Bravo for over $4billion. They also bought infovista and riverbed that were major players.
- The CEO has been in place since January 2015 - given some established competitors have been growing at 100% YonY in that time, that Statseeker had significantly increased the sales resources in early 2015 according to their statements, and that they have a much touted new release I was expecting similar results... certainly much better than the actual performance.
- The released growth numbers have all been against selective metrics and not total performance. I find it hard to gauge whether they are really growing or not, whether they are capable of investing back into growth.
- Did the new person in Germany replace the 'new' EMEA manager they put on in October? In Oct last year the press release stated Brett Biondi had joined as Senior Regional Sales Manager - Asia Pacific & EMEA. His duties included channel development but on linked in he's looking for new opportunities. He replaced someone else they had there. (That press release has now been removed in the last day or so). Seems to be some churn in the sales side. If that settles down or they put more people on I think that will be enough for me to buy.
- Most of the partners look like general IT providers of both hardware and software. Statseeker is a niche product in networking performance monitoring software. Not sure how that will work.
Urgent
- Urgent's revenue performance was down $440K year on year - and once again this is a timing issue?
- For the last few years performance has been improving so not sure why they exited the last CEO. Was a reason ever given... did he leave or was he replaced? They replaced / restructuredS tatseeker's management after taking it over, and now they replace the Urgent Management - both at a cost and both were listed as reasons for revenue performance issues? And in Statseeker's case the performance has not increased significantly since. Since Urgent's revenue was affected perhaps the CEO held key sales relationships that are at risk?
- Moving to a commoditised business sounds like a good idea but could expose them to competition they did not have in the past. I think the new products performance will be very interesting and could be a major game changer for the better. It was a good bet....
- Hopefully the new CEO there can pull it off. He seems to be in a satellite office in the US but the HQ is in the UK. Do we know if he is moving? Statseeker's new CEO is remote and now Urgent's. Not sure if that is a good thing in companies this small. Or perhaps the Urgent HQ will also locate in the US
- If either businesses get their model right then I think its reasonable to expect hitting the $5million NPAT target. I would still like to know what the strategic plan is as there seems to be a lack of cohesive strategy for the three disparate businesses. The new CEO should be able to do that. I am pretty sure they appointed someone a few years ago to a similar position- any idea why it didn't work? (I wasn't watching then)....
F.
TCN Price at posting:
7.9¢ Sentiment: Hold Disclosure: Not Held
