[conservative_indian]

>>>>>>>> Thanks DH for sharing your views.

I do agree with you that this stock is an immense wealth builder and this correction coming out from non-disclosure of SEBI’s September 2021 letter is towards its expiry date.

It is not true that SKR didn’t make efforts to soothe nerves of disgruntled investors. What made market nervous was SKR has not Audited Consolidated Financials and when over 868cr are marked down under Asset Impairment, without proper Audit it raises suspicion. And most of the asset impairment happened in third world countries like Mexico, Argentina etc. That makes investors believe what most of the Indian Business Community is expert at…. But this was a matter recorded in FY19. Stock was in single digit then. And since BCG recovered from rock bottom levels, it was a tacit understanding in investors that the worse is behind. SKR delivered two token dividends to show his cashflows are genuine. And then a Bonus issue. And party started.

He came on CNBC for interview. Do you think CNBC anchor had any dream of inviting SKR? Infact he tried to reach audience thru media channels.

What he could have done was, disclosing the letter from SEBI in September. But he thought that let stock rally and he would spice up rally with second bonus and things would go under the carpet. Unfortunately, it didn’t. And now investors are afraid of second bonus. Stock corrected before Bonus. So after Bonus, it can go down by another 40% and still 20-30% correction is pending before Ex-bonus date. So, BCG is ruthlessly butchered for underestimating power of Corporate Disclosures/Governance and the BCG Bears’ cartel. There are deep pocket sideline investors not ready to digest the scintillating story of BCG. So, BCG is becoming victim of its own success. It had to happen someday.

Then what is the way forward?

I think correction would halt around 80-90 cum-Bonus. And then stock will adjust for the bonus. The internal revenue engine and the scope of Adtech is robust. So, stock has still potential to climb up and make new highs in 2022. All depend, how fast SKR can put controversy to rest. But it can not take long. Normally, such audit takes 6-12 months. Being in operation across the border, it may take some more time. Now what if, SEBI finds nothing?

In that scenario, the very reason BCG used to be doubted by large players, the inability of the group to declare Audited Consolidated Financial Statements, would be cleared. That opens the doors for BCG to get adequate media attention and possibly it can be included in Next Nifty 50 and included in F&O.

Now it makes a perfect sense why SKR did not show interest to list BCG on NASDAQ and instead he hinted Israeli subsidiary…

At this point no need to exit. Stock has risen 50x from the bottom. So, if it corrects 50%, even then bull market trajectory does not change. But what if, all is well… The bulls will not give chance to ride BCG again. Then even 500 can be possible.

Weak hearted investors should exit as always.

The rest can Sit Tight.

Stay PUT.

We may see Ukrainian crisis to remain like Covid but it’s impact would ease by May end … With margin of safety of a month.

I had made a post after Bonus Announcement. I was not happy with second one. But it doesn’t mean that time to trigger exit button. Wealth is made by staying PUT. By holding good counters for long till value unlocks.

I expert SKR to make more media discourse to keep interest of investors alive in this trying times.

Good Luck!!!

Conservative Indian.

[Logan]

The main reason for this negative reaction is because of informing the market after 5 months. BCG always had doubters and this incident didn’t help the situation.

Technically they should inform the markets/exchanges/shareholders once the intimation for the audit is communicated, that is, confirming that the audit actually takes place than just saying we will audit you but not confirming. The company and the regulator will communicate with each other and then the regulator will take the necessary action
But as a measure of good corporate governance they should’ve shared the details in September itself.

I’ve always been critical of the company’s corporate governance and everyone knows about it. They make simple matters go to extreme. I’ve asked the CEO directly about this topic too in the conference calls. I had even suggested the company hire a board member who’s an expert on topics related to stock markets and that person would’ve properly guided the company in these matters.

[Brightspot]

Logan, anyways now it was clarified by management, probably companies need to inform to exchanges once sebi initiate audit..so how do you guys think SKR can handle this situation and bring back investors confidence back?

[myainvest]

If it is going to take 6-12 months as pointed out by CI for the closure of forensic audit – I doubt the price will really be butchered heavily ( I don’t want to say it out loud to what extent actually). I guess company already have 200+Crs FCF and in plans to increase it to 500+Crs – may be they can postpone their target of 500Crs by a quarter and use some percentage of that money to buy back to a certain extent. They may have other plans, not sure if this would be feasible. But definitely hope this would not affect the current US audio acquisition.

Or if it is possible, cancel the second bonus and again do some buy back. After approval by shareholders/sebi for bonus, whether it is doable at this stage – again I actually dont know, given we are only very few days away from bonus

They could be busy with acquisitions etc, but hope no one can deny the seriousness of current scenario

I don’t think CEO should do concall right now – given the sentiments there might be many ugly/unprofessional questions thrown at him from several investors, which may deteriorate the circumstances further. Well if he can handle it really good – then no issues. If not, then I believe clarification/notifications to exchanges advising any actions to change the current sentiments or probably via a professional media channel (should not be like a news channel debate for TRP )

[NIRAJ1]

from moneycontrol.com
courtesy to sudarshan ravi.

Here is a small list of some BIG LARGE CAP companies which have taken a Haircut with the same ASSET IMPAIRMENT case similar to BCG and they did not get audited for the same reason because of their popularity and stature. By BS Research Bureau… 1. Vedanta FY 15-20 Rs.49,392 Crores
2. RIL – FY 17 RS.39,570 Crores
3. Tata Steel FY 13-16 Rs.33.146 Crores
4. Tata Motors FY 19 Rs.27,838 Crores
5. ONGC FY13-15 Rs.6493 Crores
6. Hindalco FY09 Rs.3872 Crores
7. Grasim Industries FY 20 Rs.3245 Crores
8. M&M FY 20 Rs.1783 Crores
9. Indian Hotels FY 13-14 Rs.1178 Crores
10. Wochardt FY16 Rs.1049 Crores. —
– BCG has an ASSET IMPAIRMENT of Rs.868 Crores and the breakdown of this is posted on July 1st, 2020. As the CEO mentioned to the exchanges on Feb 28th 2022, the audit will happen and the company will submit all the trial balances, ledgers, proofs, accounts etc related to this ASSET IMPAIRMENT and come clean in few days, as SEBI needs the process to be completed with reports being filed when they open any case and they cant just hear from the companies that Audits are not required. View less

[Logan]

‘GDPR to benefit consumers, Net firms’

(June 19, 2018)

The General Data Protection Regulation (GDPR), enforced by the European Union last month, has cleared the ambiguity on privacy, and would benefit consumers and firms worldwide, said Brightcom Chairman and CEO Suresh Reddy. Besides being a threat to Google, Facebook and Whatsapp, the data privacy law had prompted staff training, change of codes, alteration of information flow and purchase of newer equipments across IT firms, he said, speaking to The Hindu over the phone.

“The ambiguity over the usage of information and privacy has gone. We are compliant with the new law and are helping non-compliant clients to suit the new requirements,” Mr. Reddy said. Saying that stricter privacy laws were expected to hit the market, he added, “The US, Australia and Singapore are watching the GDPR implementation. It is expected to be a template for them to develop their own versions.”

[myainvest]

Agree sentiments are negative currently. But if you look at the sequence of events
1. Sebi sends letter for forensic audit on 16th Sep 21
2. Company asks Sebi, it may not be necessary as they are compliant with all standards
3. Sebi confirms back on 25th Feb 2022 saying we need to do it

So when does the discussion on topic of forensic audit gets confirmed, from company’s point of view ? My view is, it gets confirmed only on 25th Feb!

If sebi had confirmed on, say for example, 20th Sep 2021, company would have sent notifications on 20th Sep 2021 itself!

[Brightspot]

SKR should publish fully audited numbers of FY21 to immediately turn negative to positive sentiments otherwise panic would continue

[kiranj]

People don’t spend time to understand the background of the concern but just get panic and move away to some momentum stocks and lose the gem. I hope these type of scrutiny is a part of the multibagger journey. Now brightcom is spoken about many and the stock is gaining more visibility every day. When things are declared clean by authorities the story is going to be completely different which everyone of us is looking for.

[myainvest]

These are the kind of times when leaders are born and create a brand name and name for themselves and for their future generations – which sets them apart from usual business mens and a respected name in society like Tatas, Birlas. Hope our CEO use this opportunity wisely!

[jmathew]

BCG already released notification that they owing to the GDPR nomes.

SEBI need upgrade and study what is GDPR ( eu) and CCPA California
Thank to Mr.Vijay Anand for sharing these info

Attachments:

1. 

   IMG-20220303-WA0073.jpg
   

[jmathew]

GDPR

Attachments:

1. 

   IMG-20220303-WA0074.jpg
   

2. 

   IMG-20220303-WA0075.jpg
   

3. 

   IMG-20220303-WA0076.jpg
   

[Brightspot]

I dont think so its sebi expected to learn GDPR, its auditor whom they elected to look into the matter should be aware of it..auditor will submit the report to Sebi..also some of the companies go to court if they find report is not satisfactory

[Deepak]

Price of bcg from 37 in sep to 150plus in feb. In that
5 month only one acquisition is already done and another usa based acquistion is on card. As per mr reddy the focus of the company is to grow multifold which will generate more cash flow and the share price will follow the same.The same way company grew from lot of acquistion in past from 10 million revenue to 600 plus million revenue.

[odysee]

Do forgive me @ Deepak. I do not quite understand the point you are making in your assumptions in #13320.
All kinds of conclusions can be arrived at from a ‘what if’ or ‘suppose’ scenarios.
We should deal with facts as they are and what information we have access to. The rest is pure speculation.

[Deepak]

Yes you are right odysee this time we can make assumption only, till the time any update come from bcg.I hope bcg comes with solid update within 2 or 3 days to clear the negative noises.

[Logan]

Instagram officially discontinues standalone IGTV app

Instagram (owned by Meta), one of the largest social media companies is discontinuing IGTV. Should they write off this asset or continue showing it as an asset in their books? Whatever they invested in that becomes useless if no one uses it. Now Instagram is investing heavily on Reels.

The company thought it could compete with YouTube when it started IGTV but it failed. Instagram was slow in short videos and tik tok took advantage of that. This is how brutal the market is. Everything changes so much and you have to be innovative to stay competitive.

Instagram is starting a paid subscription model now. Reels is not high margin.

With all these, the companies have to worry about different rules and regulations too (like GDPR). Big companies have paid billions of dollars in fines when they didn’t follow those rules and regulations.

The technology that is there today will become obsolete tomorrow. BCG started Brightcom video player and if it works out then good but if it doesn’t then they’ll have to write it off. If they don’t try they can’t grow and compete and later lose to their competitors.

[Brightspot]

Is it possible for someone in hyderabad personally meet management team of Brightcom?

[hw_tw]

I don’t think company can satisfy investors with another update or even a call … On the contrary it might create further confusion

Most of us are still stuck our minds out there on past things like company should have informed us before on Sept 16th itself … and some people have tried to justify this fixation further that company would have done some hera-pheri and that’s why they have delayed this communication etc; and other theories

Nothing can change these fixed minds except the final Audit report for which we need to wait for long

The more questions we ask, the more suspicious we start getting into … company can’t share each and every detail with us as they do with SEBI and Deliotte

Company has already given an update on sequence of events that have happened and the next course of action from Deliotte … Also previously they have already given details of list of Assets that are impaired

Some Facts which we need to Accept as is, as the things stand right now

– The company is undergoing a detailed Audit … It doesn’t matter now whether it has started on Sep 16th or Feb 25th

– The company has informed exchange as it is mandated by SEBI … Its a huge reputation impact which any company has to bear … If not for SEBI’s mandate no management would ever be willing to inform investors at this stage as it is only the beginning of the Audit … the last two days of reactions and price actions is a clear evidence of the situation which any company doesn’t want to get into

– There is no evidence of any hera-pheri yet

– There is no financial impact because of these wrong entries

– There is no timeline fixed by SEBI … and it is also difficult to fix any timeline given the complexity of it and the multiple parties and multiple iterative steps they have to get into to arrive at final report … The Audit can go on for 3, 6 or 12 months

Even Deliotte will not be in a position to give any timeline

There is no point in keep asking the company for an update and infact there is nothing which a company can update us apart from saying “The Audit is going on and we will inform as soon as there is an update worth enough to be informed” …🙂

Instead of getting into never ending questions mode, its better that we focus on following things

– Suggest possible actions actions (except another update) we seek from the company so that the Trust can be built …
Like closure of Media Mint acquisition soon, Releasing Guidance numbers early etc; and some others as suggested by one member in Telegram channel

– Focus on the happenings on the business front during this period

– And finally Wait for the Audit report

[explorer]

I agree with @hw_tw that the company cannot do anything about the audit and reputation damage already done. But it can do a lot of other things to rebuild it.

1. The company was planning to improve its accounting practices and in the AGM we were promised that the investors would be informed about it. The company can let us know that.

2. Promising Limited review report of its consolidated statements for the current FY.

3. The company was expecting 250Cr FCF by end of March. So by now, they should have some cash that can be used for ESOP buying. Use a small percentage to buy some taken shares in the ESOP account. This will improve the sentiments.

4. Provide forward guidance for growth and FCF for the next FY.

5. Inform if they are going to stick to the dividend distribution policy which states 15% of FCF will be distributed.

[Author]

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