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GlobalSCAPE, Inc. Message Board

  • legend6871 legend6871 Nov 21, 2012 11:01 AM Flag

    Good news

    I am not surprised by recent developments and you shouldn't either if you read my old posts. I moaned & groaned about the CT deal at its genesis. Then I wondered aloud why CT kept needing more cash & why GSB gave it to them & why we never received any CT updates. Now we know.

    Also, early on I fearlessly predicted 3Q12 EPS of $.01, which was exactly correct before the CT write off...which I also predicted when I questioned what the GAAP rules were on writing down non performing assets. I feel CT would have been a write off even without the CT sale...which sale was obviously a distress sale.

    The good news IMHO is the bad news (my predictions ) is (are ) behind us. If only half of what the CEO is telling us is true, there should be blue skies ahead. Appsh.. is dead, that whole market has probably evolved while CT fiddled...hopefully no more cash spent on that mess. Tappin is award winning and gathering partners. The CEO has told us sales & EPS will grow strongly thru 4Q12 and 2013 and beyond. Today, I cannot think of any other potential disasters other than no growth. Can you?

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    • Legend: I concur. CT was a disaster, and management knows it. Taking AppShield out of the picture, their core businesses (e.g. Enterprise EFT, M&S) are healthy. Let's not forget the transition to M&S is cannabilizing licensing revenue, which would have been more beneficial to revenue in the near term. Tappin is showing some promise with the Seagate adoption, among others, but time will tell. It is an innovative product that has the potential for meaningful sales growth. I agree with others that the additional debt is a reason for caution, and Tappin's revenue stream is not guaranteed , but the current PPS reflects all known risks and more. It does not take much selling pressure to knock this stock off it's feet, and no one wants to catch a falling knife. IMHO, the stock will stabilize and move much higher from these levels. A move back to the $2.20's from here would be a 50% move; Not that $2.20 is anything to brag about. Simply put, there is more upside than downside.

      That said, I can appreciate the criticism of management on this board, especially for those that have been in this stock for years. The price action as of late should be a "wake-up" call for management that they need to maximize shareholder (i.e. one way or another), and investors patience is not infinite.

      • 1 Reply to go_big_or_gohome
      • "...but the current PPS reflects all known risks and more." I am an open-minded person and respect others opinions. For those of you who are open-minded as well, I am sure you will take the following into consideration. (By the way, for those of you who are not familiar with my posts, I was a shareholder of GSB until we got the details (i.e. the 8K) related to TappIn. TappIn was what broke the camel's back for me.)

        Anyway, since the acquisition of TappIn, the balance sheet has deteriorated with nothing, really, to show in return. It has been a year now. The Tangible Net Worth went from $13M+ to a negative $5M. The SG&A will continue at the current levels or more until the end of 2016 everything else being equal because TappIn added roughly $1.4M+ per year in loan repayments. The loans will be repaid by the end of 2016. Since it has been a year since the purchase of TappIn, the score in that respect alone has been $1.4M to nothing. Add to same the additional payments to the TappIn investors and the score will continue against GSB.

        What about expected revenue? We'll see but given the subscription fees, it appears that it will take a long time. Morris has not projected any numbers to the shareholders thereby leaving you in the dark. (Actually, even with his projections, you will still be left in the dark because he has not been able to project reasonable figures for the company as a whole as I noted in my previous post). The reason why he has not done so, imo, is because TappIn is still a "newborn child" and Morris does not know if the "newborn child" will be able to walk. Of course they believe in the "child" for they bet a lot of money on the come. Strictly on the come!

        A year has gone by and TappIn's revenues are very insignificant. TappIn's revenues are included in the Other line item which also includes MIX, Hosted EFT, Mail Express, and TappIn. Collectively, they represented $306,000 dollars for the last quarter with most of the revenue generated by the first three. At the current rate of growth, you will wait many years for a return on Morris's investment in TappIn. Compare same with the referenced $1.4M ($0.07 per share) in additional expenses. By the way, the total diluted shares has also increased noticeably.

        Did you notice that the Professional Services revenue dropped significantly compared to the previous quarter (i.e. 2Q)? It was a result of lower revenues from the MAT contract. Will it continue in this quarter?

        Thank goodness for EFT products which have been able to offset the decline in others. Will the growth continue into next year when some people are projecting a recession? Is the growth sustainable? Morris better make it so because otherwise they will go from bad to worse.

        I could go on and on. The purpose of my postings is to let you see that every coin has two sides. Don't be fooled into thinking that things will get better albeit they might. If they, in fact, get better there will be time to jump on board. However, if things do not improve, the price still has room to fall and this is what led me to post again. Until after 2016, the prospects are very questionable, imo. Personally, GSB looks better to own after 2016 because until then SG&A will continue to offset the possible growth in TappIn and EFT revenues. As I noted, the repayments make up $0.07 per share. So, TappIn et al need to add same to the bottom line. Will they do it? Personally, I do not think so. I am yet to be convinced that TappIn revenue will grow such that it will change my mind about owning the stock between now and 2016. I will be watching it, however.

        One thing is for sure, I REALLY hope I am proven wrong and that we ALL make money in the stock market. And for that, GOD bless America!

 
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