Great thoughts below on the risk and BS in the stock, but a few items interest me.
- warrants and stock offering are at higher prices than today
- insiders bought last year and own a fair bit at much higher prices
- revenues growing and apparently close to break even
- most legal actions being settled and closed with payments to AUGT
- seems like a complete management change in past 6 mos.
- management owns a decent stake so i think is motivated.
dilution, cash flow, real earnings and changes in technology (value of patents) are all risks. seems like the entire sector is hated and in the trash right now.
Seth, you are correct that we are in a sector rotation and hence its putting pressure on our already damaged stock price. But one thing you need to add to your "like" side of this is that last Q's new booking number was extremely encouraging specially when you consider it was during their weakest Q. I know based on my conversations that the Ad network side of the house is rocking and AdServe has been great advantage since its addition to our AdLife platform. I have a reason to believe that this sector will continue to help us grow into BE and that we can see acceleration even in coming Qs. But at this price the risk to down side is really none existent.
We are beginning to see interest and money flow returning to the space. Despite the market indices being higher, they've been primarily lead by large cap defense stocks. Small and micro-caps continue to under perform. We recently initiated a position in MM near $6. We believe they and Augme are in some form of dialogue with respect to the lawsuit which could ultimately result in some form of larger transaction. The combination would lead to an industry powerhouse. We continue to like Augt shares at current levels seeing them severely undervalued. Models continue to indicate a 1X multiple as almost unheard of. Aside from the obvious acquirers, company remains vulnerable to acquisition as confirmed by the previously mentioned call we received as to whether we would support a funds possible offer to take the company private. We continue to expect the shares to eventually trade in line with the current median analyst concensus target of $1.25. Ultimately we see the company sold. We believe any possible sale would yield at minimum a 3X-5X from current levels and the same as a multiple of revenue.