Shortly thereafter Castle was soon join by Merriman Capital which through an open letter urged Procera to "hire an investment bank to help evaluate its options."
Summary and Balance Sheet Considerations:
As of the close of the last quarter, the company had some $102 million of net cash and marketable securities on the balance sheet after burning through some $5 million in the quarter as Procera continues to post small losses while awaiting revenue growth to resume. This is over two-thirds of the stock's current ~$150 million market capitalization.
With the prospects of a better year ahead, it appears an opportune time to action this attractive entry point. 2015 could very well be the year - new products and a new marketing leader could drive a much better sales year. If not, activists could enable a sale to a larger player in the space at a significant premium. Subtracting out cash and Procera is selling for around 60% to 65% of annual sales, a steep discount to other firms in the same sector.
part 2..Procera is the fourth or fifth largest player in this space. This area of the market is projected to have impressive growth. Infonetics Research projected the market for these deep packet inspection solutions driven by the explosive rise in mobile traffic will grow from just over $700 million in 2013 to some $2 billion by 2018. Obviously if these projections work out this provides a strong tailwind for Procera over the next couple of years. A Lousy 2014:
The stock has had a rough year, especially after the third quarter where the company failed to close several major deals. A new module launch in the first quarter as well as a new worldwide sales leader should hopefully boost revenue growth and lead to a better closing rate in the New Year. The new sales chief has experience in taking similar companies from tens of millions in revenue to hundreds of millions, something critical for Procera as it transforms to a larger player in the space.
In addition, sales to North American cable customers decreased dramatically in 2014 due some M&A deals and speculated M&A deals which caused these customers to "hunker down." Sales to cable companies represent just over 50% of overall sales. This headwind should subside in 2015. The company also has a dedicated video analytics product in the pipeline to address a growing need around the growing demand for video data analysis. Revenue for 2014 should be in the $70 million to $75 million range, in line with the same levels in 2013 .Activists On The Prowl:
The poor performance of the shares in 2014 has started to attract attention from activists which could be a major positive catalyst in the months ahead. Hedge fund Castle Union Partners now owns an almost seven percent stake in this tech firm with just a market capitalization of slightly less than $150 million.
Back in October Castle Union issued a statement stating it may engage with directors at the company to discuss strategic alternatives, such as potential sale of biz.
Actually it's Microcap (IWC) and Microcap just caught fire last 2 days, doubling % gain of Nasdaq. Also, this article was written yesterday and published 1/2 hr ago!! That might explain some of the higher 2 da volumes:
"Beaten down Procera Networks is rallying today/ yesterday on the announcement of some new orders and this could be the start of a significant rally in the stock.
The shares have had a tough year as the stock has been cut in half from earlier highs as revenue growth failed to materialize during the year.
However, the company has a cash rich balance sheet, activist funds are circling and positive catalysts are on the horizon. The environment is starting to look brighter for Procera.However, yesterday the company announced some new major orders which is pushing the stock upward in trading Tuesday.
This is the first piece of good news the company has delivered to its shareholders in quite some time. The shares have been more than cut in half from highs earlier in the year as revenue growth has failed to materialize in 2014.However, the company has several possible positive catalysts on the horizon, activist hedge funds are circling and more than two thirds of the company's market capitalization is in net cash and marketable securities on the balance sheet which should significantly curtail further downside. The stock is offering an attractive risk/reward profile at current levels and I would not discount a possible buyout in the foreseeable future. I added a few more shares on this announcement as I hope it is the start of a substantial rally in these beaten down shares.Procera Networks provides deep packet inspection solutions that empower networks with Internet Intelligence, allowing them to gain insights on how a network is being used, and enabling the operator to take action. These solutions are deployed worldwide by network operators and network vendors to deliver a higher quality of experience for their subscribers on their networks. TBC
last 2 days there were 35- 40k shares dumped at market on last ticks of the day..hope this was y/e tax loss selling.
there's your +40% volume jack. Someone big was verry determined to keep share price below 6.93 50 da ma in last half hour and they were successful. Selling large blocks at market..
Buffaloe, I think it is door #3..price suppression by either competitors/ Google or someone accumulating on downdrafts. I'd love to know why the 2 BODs left.
DU, I thought you always nailed the intermediate top with a sale and then always bought back at the low?? Are you underwater? What's your avg cost now?
I believe it is the ranking ASIC that might also do Netbios emulation..don,t think it's the buffer chip..here's a repeat of my 11/5 question to board which I never got an answer to. This is the key as per the judge's latest questions to Netlist during the injunctive relief hearing
"One of the whistleblowers actually photographed the Netlist HC chip/ die/ maskset portion used by Diablo. I would love to see more info on this and understand the IP theft involved..and how BadAlone/ Amar translated this IP theft to an MCS flash NAND subsystem...
.So what's the lost business case for Netlist..DDR3 HC modules or future lost biz of 500X HyperVault??...Netlist might win the injunction and block/ retrieve MCS chips from IBM/ Sandisk customer accounts..very heavy move by court there.... maybe on 12/2/14 we find out, eh?
How strong a presence of Netlist IP is contained within Diablo MCS hw and sw???
I don't have to tell you pukes how much money you can make here on long side if you guess right on above..LT 58.5 cents! "
yeah, we need volume that is at least +40% of daily avg to confirm this MACD crossover breakout..7.09 LT and bigger vol than earlier..
one more thang...50 da ma is 6.93 and we're trading above that now. If that holds we're good to go for short term methinks..
there's 2 double bars and 8 crossings of resistance from 6.90 to 7.24..not too bad.
there's single 1/ 3 strength resistance from 7.26 to 7.62...less bad
there's Serious triple/ 10 resistance from 9.46 to 9.92 and 10.01 to 10.51...formidable from 9,46 to 10.51
Need volume now..aah, we just hit LT of 7 bucks a share!
most informative and honest post yet...JK&co retained control of RVBD in a private LBO..no " entrenched mgmnt" forklift..they get to re-baseline company and re-spin in 2 years for Huge Deniro % PPS increase.
My guess is mid thirties by late 2016, right at the end of this fed-fueled bull run.
Blue Coat and Sonic Wall LBOs/ PE moves always shaft existing shareholders...not fair but Money talks..
There should be a counter offer but that half Gigabuck of LTD hurts, Charley..
coming to your hood..hope yer long here chumpchange..today's volume was +38% higher than yesterday and strong +6% action in continued overall market correction...
One More Thing...A/D is now B-, up from C-...
All it takes is for one of these Tier 1 folks to start seriously scaling up on their 100GE PL20000 platform investment
VOLUME 165.5k shares, +25.6% compared to typical volume of 131.8k by 1:25 pm ET (15-20 min delayed).
Typical daily volume is 244.1k shares over the past 6 months.
Also, Russell 2000 will jump 20-25% in 2015..from m107 to 140 forIWM..
Procera (NASDAQ:PKT) has "received several-million dollars of orders from Tier 1 operators" for versions of its high-end PacketLogic 20000 deep packet inspection hardware system featuring 100G interface cards.
SVP Andy Lovit: "Network operators are beginning to deploy subscriber experience and analytics solutions on 100GE instead of 10GE interfaces, and the PL20000 has segment-leading port density and performance for 100GE networks." The product can support up to 8 ports (4 channels) of 100G traffic, and has a max throughput of 600Gbps.
With shares down 57% YTD going into today, it's relatively easy for good news to trigger a positive reaction. A high short interest (17% of the float as of Nov. 28) also doesn't hurt.