[Logan]

Thanks @Saach, @akkithegrt, @Longplay55, @odysee and sorry for the late reply.

Like how MediaMath failed, many other adtech companies also failed in the past (especially in the 2013 to 2019 period). At first even I was critical on the CEO for not taking enough actions to bring stability to the stock price but when I started reading more about other companies and the adtech industry as a whole, I came to the conclusion that this was a very tough business to be in and that he was doing the best thing he could by balancing different situations the company was in. I admired the CEO for tackling many issues at once and for keeping the company steady (business not stock price) but I’ve also have been critical of the way he communicated about few topics. There were legal issues like Lycos case, then the company had to pay off the debt, then there was fierce competition in the whole industry and of course the ever present cash flow/receivables issues which is common in the industry (having to pay debt also caused more strain). Few companies went down because they couldn’t tackle the cash flow issues, few because of the strict privacy laws and few because they couldn’t adapt to the technological changes. From the outside (especially to self-proclaimed Twitter heroes) everything looks easy but only after digging deeper you will understand how hard it is to run an adtech company. It’s not as easy as sitting at home and commenting about name changes of the company all the time.

The adtech market has changed a lot and especially now that AI is the craze, it’d be prudent to invest in technologies that benefit the future. I keep saying how important Brightcom programmatic was to BCG all the time because it was started at the right time and had they started it even two or three years late, I’m not sure the company would’ve grown like it did in the recent years. The competition is not just between smaller independent companies but also with giants like Google, Facebook, Amazon and Microsoft (which has grown its adtech business in the recent years) and these companies have hundreds of billions of dollars in cash.

People dismissed how important market sentiment was/is and said that it’s all made up but no one can ignore it and its impact. As Mark Twain said, “history does not repeat but it rhymes”, we are seeing similar past trends rhyming now. Instead of Lycos-Daum we have FA and SHP issues, instead of VC and PE firms dumping shares we recently had LLPs who were allotted shares on a preferential basis, dumping all their shares. One (Lycos, FA, SHP) creates negative sentiment/perception and the other (selling by VC, PE and LLPs) brings huge supply and hence slide in stock prices. We don’t need more explanation than that. In the past, people were not giving importance to the business and didn’t understand it properly but thankfully, now we are seeing a change in the trend. Back then all tech companies were considered as typical IT services and outsourcing companies but the situation has improved a lot now. The reason the stock recovered after plunging now is because people understand what is important and what is not but the same didn’t happen the last time because of how the company was understood in the market. Now we have Mr.Shankar Sharma too explaining which is important and back then we didn’t have anyone to do that.

FA final verdict has not come yet and SEBI may ban the company from accessing capital market for 2-3 years and it may remove the CEO from the position of CEO and chairman for 2-3 years. Though I think the chances of this happening are slim but we have to be ready. I asked about this in the conference call also and the CEO said that they are prepared if such a scenario happens which is good to know. Also, many people have invested because Mr.Sharma invested in BCG and if he sells few shares also, some people might panic and they may sell their shares. He has said that it’s not only for BCG but he will approach most of his investments similarly but as we know, people will not give attention to that. I just wish and hope that the CEO and his team will take investor friendly decisions and that BCG will reach its fair value at the earliest.

[odysee]

Very interesting reading as always @Logan. Thank you.
As regards your last paragraph..🤞🤞🤞.
My only concern has been that the regulator may take some inequitable steps, just to show they mean business and to justify their aggressive SCN as well as to display some really large teeth. The proportionality of whatever the final order, post any adjudication process, will certainly be up for debate.
But at that point of time only. Let us hope that rationality and equity are given their due weightage in the final evaluation of the company’s stance and accounting practices of the subsidiaries that were adopted to comply with the rules, regulations and requirements in the domains they are operating and registered.
The subsidiaries’ financials in the required revised manner have been updated on the company’s website upto FY 21-22. Just waiting for the final upload for 22-23.
The compliance deadline for all directives and the SCN is 13th July 2023 as per my understanding based on the SEBI notice shared by the company with the Stock exchanges. ( please correct me if my understanding is misplaced). Thereafter, we await the June quarter results ( by mid August) and the final order from the regulator after the company has responded and dealt with all requirements.
It’s been a long and eventful and tumultuous journey, but not for lack of excitement or drama. That is for sure. Good luck to us all and the best to Mr Reddy and his team.

[nitin_asce]

Can anybody confirm if bcg tds and dividend details are showing in form 26AS/AIS respectively.

[BBPopuri]

No Dividend was paid for BCG share holders during the financial year 22-23. Hence no entries n 26AS/ AIS.
Dividend was announced some time back but it is not paid so far. Please correct me if I am wrong.

[sagraa]

Dividend TDS gas been deposited. I can see it in my Form 26AS.

Please check for yours also.

[BBPopuri]

Dividend TDS could stir another controversy. When I verified my AIS recently, I thought that BCG has not paid dividend during FY22-23. Today on verification of my bank statements I found that BCG has credited the dividend on 27 October 2022. I have received dividend in all accounts (I have BCG shares in 4 demat accounts) Just now I verified AIS and found that none of the amounts paid to us were available with IT dept against our PAN. TDS deducted is huge. AIS has the information of Rs 53 dividend paid by ICICI Pru Life. But BCG info is not available. I presume BCG has not deposited the TDS amount with IT and data was also not available with them. Other laps from the management on CG front. These are all unnecessary issues which can be easily avoided. They did report last year and an year before. Earlier there was no tax on dividend hence Form 26AS has no information on dividends. Now it is our responsibility to report all dividend receipts and pay tax as per our tax slab.

[T9C]

Thanks @Sagraa, Dividend TDS is now showing in form26AS from yesterday, last week it was not there.

[akkithegrt]

I don’t believe there will be a significant effect on BCG’s share price from the latest SHP (Shareholding Pattern) utilization as BCG’s business is growing. Once the forensic results are out, regardless of the outcome, it might experience a short-term decline, but in the long term, the share price will reflect the business growth.
Highly bullish on long-term growth on BCG!!

[rishi]

6764e084-d78d-49fc-83e6-ff9f2ce93350.pdfRef: BCG/SE/2023/Ju1-02 Date: July 22, 2023
To
BSE Limited
P. J. Towers, 25th Floor,
Dalal Street, Mumbai – 400001.
BSE Scrip Code: 532368
To
National Stock Exchange of India Limited
Exchange Plaza, Bandra Kurla Complex,
Bandra (E), Mumbai – 400 051.
NSE Symbol: BCG
Sub: New Collaboration with LoopMe’s Intelligent Marketplace
Dear Sir/Ma’am,
We are pleased to announce that Brightcom, recognized for its global consolidation
of Ad-tech, New Media based businesses, has partnered with LoopMe. LoopMe is
renowned for its expertise in artificial intelligence-driven brand advertising
performance.
As a proud publisher within LoopMe’s network, Brightcom is fully committed to
harnessing the vast capabilities of LoopMe’s Intelligent Marketplace. This ground-
breaking platform is transforming the programmatic ecosystem by enabling supply
partners to maximize the value of their inventory whilst ensuring high bid matches
for demand.
This powerful alliance is set to revolutionize our interactions within the digital
ecosystem, home to over 2 billion monthly active users globally. Our synergistic
efforts are geared towards amplifying engagement and enhancing our global
footprint.
The Intelligent Marketplace by LoopMe, powered by AI technology and dynamic
filtering capabilities, offers unparalleled advancements, including a 40-fold increase
in DSP buying efficiencies.
Brightcom’s illustrious portfolio of collaborations extends to a vast network of blue-
chip advertisers, top-tier publishers, and agencies. This includes industry
heavyweights like Airtel, British Airways, Coca-Cola, Hyundai Motors, Facebook,
LinkedIn, MSN, Twitter, Yahoo!, Havas Digital, JWT, Mediacom, and Mindshare.
We are optimistic that this alliance with LoopMe will catalyze innovation, taking
our service offerings and operational efficiencies to next level.
Thanking you,
Yours Truly,
For Brightcom Group Limited
___________________________
Rajesh Vankadara
Company Secretary & Compli

[Logan]

MediaMint Secures Growth Investment from Everstone Capital and Recognize

Mediamint is getting investment from 2 firms. Acquiring a company is one thing but getting investment to grow (or for working capital) is another thing. I’m not supporting what the management/CEO did with Mediamint deal and I’m talking about the next steps involved post acquisition. What’s the use in doing only the acquisition and later you don’t have money to invest in the operations? You’re not just acquiring the business but the operations too and who will fund the operations? And what happens to your own operations if you devote all your capital to the new company?

Please be careful when you read comments on platforms like mmb, Twitter, YouTube etc. Most of them are traders who don’t understand the operations properly and look only at stock price movements. Few are not traders but they think fundamentals means looking only at P/E ratio. They will misguide you and bring the perception that acquisitions are more important than operations just because things like acquisitions etc bring a temporary positive sentiment.

Both the companies that are providing capital/investments are investment firms and not companies that have operations like BCG. Their main job is to invest in good technology companies and guide them whereas BCG has its own operations to worry about. Like I said in one of my previous posts, if BCG acquired both the companies (Mediamint and Audio ad) then there wouldn’t be any cash available for 1) funding its own operations 2) funding the operations of both the acquired companies. BCG had to take loans. For tech companies, debt is like drugs, gives temporary benefits but will be very bad in the long run. We can see most tech companies will not borrow much and they’ll be okay diluting their equity.

Not getting acquired by BCG is also a plus point for Mediamint because they can work with whichever company they want but if they were acquired by BCG then they couldn’t work with BCG’s competitors which would’ve resulted in less growth.

Even though a decade has passed since BCG became a public company, the management still don’t know how to handle communications properly. They don’t understand that public markets are sensitive and that they should be very careful about communications. They could’ve avoided so much speculation if they informed the market about changes in both the acquisition plans earlier than they did. Them dragging the topic made matters worse when there was FA news also. What I have observed is that the management still have private company mentality. You can see the board also. With all respect, except Mr.Peshwa Acharya, I don’t think others will anything important to the company. But for the CEO, it’s a plus point because they won’t interfere with him on the decisions that he takes. It’ll be good for the business side of things but not always for the valuation side of things. Others who had experience in public markets would’ve told him to communicate properly with the markets. With the appointment of CFO and CS too. They wouldn’t have let him drag these for so long.

Private companies change plans frequently and will look at business first but public companies, even though doing something may harm the business in the long term, will still do it not to upset the markets and complete it to show that they are committed. The latter will bring stability to the stock prices and will be much less volatile. I can give the example of DAUM case. Like I said, any other CEO would’ve closed it first. Doing that would’ve given temporary stability but I’m not convinced that it’d help the business in the past, present and future. As investors we have to be aware of what type of company we have invested in. We should know the culture, DNA etc. Like I said in the past, both the business and valuation of the company are where are they now because of the CEO. Business wise he took good decisions but valuation wise he has taken mostly bad decisions.

[Saach]

Dear Loganjee, I totally agree with your precious points explained in straight forward manner, as always. I appreciate it and salute you for your nature of sharing with retailers who are not from this field. My warmest regards.

[vkhare789]

Hi Logan,

Thanks for your comment. Regarding Daum settlement, in January, Mr. peshwa said in conference call that they have found a way to transfer money through a bank which has common presence in both countries. And they have found a mechanism as well which is through letter of credit. Also, he added that it wont be long before this matter is resolved. Today, it has been more than 6 months and there is no update of daum case. In the world of digital payments where money transferred in super fast speed, taking this much time raises question on management communication, thought clarity and execution. I hope that they eventually will take good business decision but time taken to take that decision and communication on that decision are also very important.

[nitin_asce]

I think daum is done and dusted. Money is paid.
The Issue is shareholding of promoters. When they reach the desired shareholding level, all balance issues shall be automatically sorted.

[vkhare789]

I dont think money is paid yet else, they would have disclosed it by now.

[Logan]

@vkhare789, I’m not sure on that and whatever I say on that will only be speculation but I can talk about the attitude of the CEO and the company’s management which is making things like that to happen regularly.

We can see that the CEO gives false hopes or tries to patch up a thing just to get past the current situation (in this case to get past the different conference calls) and I think it is his biggest drawback/flaw. Like DAUM issue, it used to happen when anyone asked him about closing all the bad debt. He always used to say it’ll be done in 2 or 3 quarters when in reality it took 3-4 years.

On audio ad company acquisition also, first they talked about it in December 2021 or January 2022 but we got the proper details only in February this year. There was no need to drag it for so long. Mediamint deal too.

Shareholders and the market will be frustrated with this attitude. We have to wait so long for something to happen. We can understand some things will be complex and they can’t give proper answers or the timelines but they can avoid giving false hopes. This is where the board plays a big role. The CEO is not a bad person but as mentioned above, he has a tendency to lie or give false hopes and create unnecessary hype. He’ll say one thing today but in the next conference call he’ll say the opposite. Another example is giving second bonus within a year which is the main reason for operators controlling and manipulating the stock prices. It created so much free float. Any sane person wouldn’t have issued so many shares and that too within a year. Someone has to advise him and also, he has to control his actions and should think many times before taking any.

Compared to the past there’s a big difference in the way they communicate but that’s not enough. We shareholders and the market need actions and not words. I’m not interested in getting back Lycos or its business but I want them to close the issue so that they are committed to getting rid of all the issues and keeping a clean image.

He answers all the queries in the conference calls and hasn’t skipped conducting the conference call even for a single quarter which is a good thing but we can’t wait till the conference call all the time to get answers from them.

In one of the interviews of Bill Gates (don’t remember which) he said that while in college he used to do all the stuff at the very end and get good grades and everyone was impressed by that and think he was very talented but when he did the same thing with clients etc when at Microsoft, no one was impressed and they expected him to do everything on the very first day. One thing may work at one place or it may work one time but the same will be very bad at a different place and at a different time.

In BCG I think the CEO and the management have the attitude of doing things at the very end (I’m not comparing the CEO with Bill Gates or BCG with Microsoft. I’m mentioning this because some talented people will make up things in their heads and say that I was comparing the CEO with Bill Gates etc). Once or twice they may have done something at the very end and the market might have been okay with it so they repeat it all the time and become too lazy. Suppose they have 30 days to do something, let’s say to pay dividend, they’ll not do it on the first day or the earlier days but they’ll do it on the last day. Same with bonus shares, the recent TDS thing, and many other times. Good companies that have good perception in the market will always do something on the first day itself or at least in the first 5 days or at the latest in the first 10 days.

Someone at BCG should make this attitude go away and should bring a different attitude where they do everything on the first day. Doing this will show that the company is committed to its shareholders and the they are serious about everything. If these are done then the market will not react extremely to small issues also. Currently the market reacts extremely because it doesn’t trust the management. If the company is transparent then it’ll get good valuation also.

[Saach]

@Logan, Your guidance in the last paragraph is the whole summarization about the nature of the human understanding and disciplined way of thinking and working, simultaneously. I appreciate it, repeatedly your related valid points. Thank you so much.

[VALUEBUYER001]

New BSE notification has come.
Bcg requested another 45 days time for audit

[vkhare789]

@Logan
I think management read your comment and thus provided an update yesterday. But from their notification, it appears that they may have started to take some of corporate governance issues seriously. Two main that they mentioned:
1. The primary focus of Brightcom Group is to maximize value for its shareholders: Good to hear this from management. These words put faith in investors’ community.
2. We want to reassure our investors that the promoters are taking the necessary actions to cover the lost ownership percentage soon: This is great. This means that promoters will increase their ownership by atleast 0.03% which could even be more.

As a result, we are seeing upper circuit today.

[Logan]

@vkhare789, if they continue this type of communication and give timely updates on many important topics then all the shareholders will appreciate them. Other part that they should improve is about getting things done at the earliest and not wait till the very end to complete them (like I’ve mentioned in my previous post). If these are done properly then no one will have any complaints about the company.

The CEO and team will usually take good decisions on business related things and if they put little extra effort and concentrate more on market related things then BCG will get a decent valuation and if they continue that further then the company will get very good valuation.

Last year they tied up with Intent IQ and started working on how they can get more in a cookie-less environment. I think Intent IQ does more than 1 billion cookie less impressions per day which is amazing actually. Then they did JVs with Qulabs first on quantum computing and then on audio ad with Consumable Inc. This year they have collaborated with Loopme. This company has gained a lot of traction in the recent months because of the AI buzz. All these are positives but the market didn’t recognise this or didn’t care much because the company doesn’t have a good image because of few things like FA, SHP issue etc. Though FA did not affect the operations, it still impacted the image.

The stock is trading below 4PE (less than 3PE if we take this FY estimates) and other companies with bigger problems are trading at better valuations. The CEO and his team should analyse this and try to fix this at the earliest.

[Logan]

I request everyone to send mails to the company or call them and ask them to take more questions in the conference calls or extend the conference call time to at least 75-90 minutes. From past few calls they are taking only a few questions and the first 30 minutes (or more) are wasted in different updates or they talk about audio ad or quantum computing or AI etc. That would’ve been okay if there weren’t any issues but now they have to take more questions and address shareholders concerns.

If they want, they can schedule a different call explaining only about the business updates.

[Author]

Posts