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EGAIN COMM CP Message Board

  • tennisscott83 tennisscott83 Apr 16, 2007 1:48 PM Flag

    Convince Me

    I am on the verge of buying in with a somewhat large position in EGAN because I believe in their product. I need a little more convincing, however, in order to get into a stock where I know my wmoney will be locked up fo ra long time because of the veryyyyy low volume.

    Please, give me some good reasons to buy (or not to buy) EGAN.

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • For what it's worth I have seen a few articles lately saying their technology/service is being picked up by a few companies lately (inlcuding Cisco Systems). I also know that a large (very large) mutual fund company has purchased their latest version to interact with clients to provide customer service via the web. My thought is that you would think companies like those (although I only mentioned one by name) must have the money to spend on technology and for some reason chose eGain. Who knows? Do your research and good luck.

    • Never worked for them, wouldn't work for them, never worked in the CRM biz. Furthermore, I've never been let go, or asked to leave, or forced out on any position I held in my life.

      I'd give a balanced approach to an analysis of EGAN.OB if there was a good side to this. There isn't...not even for Ash who has plunked more of his personal wealth down to keep EGAN going.

      Glad you enjoy my posts. I enjoy writing them.

    • I'm afraid it will be difficult to accumulate much of a position without driving the share price up quite a bit. That said, here are some arguments I would make; they are probably crap but here they are anyway.

      1) Inside ownership. The executives own an awful lot of shares. Unlike most companies they have held them for many years and not acquired via option exercises. No one can argue that they are staying in it for the salary.

      2) Ash Roy. This company was out of cash and really didn't have a way of raising additional equity becuase of the preferred that was out there (converted to common now). Ash Roy and Oak loaned the money to the company to get by. Ash also cut his pay to $24 per anum; this was leadership by example. If I worked for eGain and the CEO did that I would feel loyalty rather than being ticked off about all of my friends who had lost their jobs, cut in pay, and too much work.

      3) Eric Smit. It was inexecusable the way the company blew through cash before Eric became the CFO. They cut costs far below what I thought was possible and they got to cash breakeven. I was positive that they were dead and just was watching because I just enjoy watching companies tottering on the edge of bankruptcy.

      Eric Smit bought some preferred prior to the conversion. He wasn't required to do a filing with the purchase price. It has always bothered me that I don't know what he paid.

      I also look at the SEC filings and various things like stock valuation for option grants where I feel like I can guage how good the accounting staff are. I think Eric has done a good job with things like this and is a real asset. I like the way they use a second tier accounting firm (BDO Seidman).

      Finally, perhaps I'm wrong, but I've always thought he was likely responsible for the way they handle the quarterly conference calls. They used to be kind of pathetic to be honest but now they are short and to the point with no opportunities for stupid shareholders asking questions. With no brokerage houses following it they shouldn't allow questions in my opinion.

      4) Negative. Last quarter they increased marketing expenses and began to generate losses again. I'm worried about this and they have to get back to breakeven or they will go on the bankruptcy watch again.

      5) Tom Hresko. VP Worldwide sales for last 9 months or so. Well so far he hasn't delivered AT ALL but he has done well at prior jobs. Maybe he will succeed.

      6) RNOW valuation. Call me crazy but I've always thought that a properly capitalized and managed eGain could go after RNOW. I've pretty much given up on this but can't we at least get a $50-$60 million valuation?

      7) Negative Valuation. They've never made any money and there are good arguments that the entire tech sector remains overvalued. There is also lots of competition out there.

      8) Cisco OEM. I dunno. OEM is the way to do it if you don't have plenty of cash so give them credit for this.

      9) Product. I dunno; sounds like you like it. Would be interested in why you like it and if it is better than others.

      10) Lack of following. No one is following this thing and you are ahead of the curve (or perhaps far far behind it). I don't think eGain will have the same structure two or three years from now. They will go private, sell out or become successful and become a real public company again.

      My guess is that they will do a share offering with some of the long-term shareholders selling some of their shares. that or they will finally go bankrupt!

      Good luck.

      • 1 Reply to cohsgrad
      • Nice summary Cohsgrad. Here is another look at them...

        1) Because of the low float you will end up paying more than you thought to get a sizeable amount of shares or end just up with less than you want at the price you want. If you try to sell it works the other way. There is little interest in this stock.

        2) No insider buys at this price.

        3) The software wins awards but it is not translating into license revenues. Last Q was not impressive.

        4) Who wants to buy software from a company with such a small market cap and which is NOT growing license revenue like a healthy company.

        5) Do a search on www.cisco.com for "egain" to see how invisible eGain is to Cisco.

        6) Why is it that the careers listed on eGain's web site seem to be the same ones listed for well over a year. I could be mistaken but those look like they are not getting filled.

        7) Where are the new customer press releases?

        8) This stock could go private for 17 Million

        I have been holding a boat load of this stock for some time now but something smells fishy. This next quarter announcement will be a big indicator for me.

 
EGAN
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