[odysee]

Thank you for your observations and comments @logan.
But what can be done by BCG at this point of time? Because of circumstances and bad-luck and indiscretion ( by announcing that White Oak would provide funding of 150 million USD), that opportunity has passed because of Daum’s responses then.
Where are we today? In the current scenario, there is again uncertainty and ambiguity that has arisen despite a clear path having been charted out by the management at the end of last year to break the stalemate and the various assurances provided by them over these last many months.

[ramganesh1982]

I am still not able to put the puzzle pieces together on recent actions ..

1) stock moved up in anticipation of Axis Bank loan closure after oak sell off (2 crore stocks consumed here means definitely operators play)

2) sep 22 axis nclt issue got pushed .. stock goes down for couple of days and again someone consumed min 1 crore stocks last week

3) promoter for the first time after 2016 has come out and purchased 2 lakh shares … Considering his previous buys this is a big number . Which means he is thinking positive about the future prospects ??? Shouldn’t we assume it that way or am I wrong

4) price keeps falling from very next day

5) now from today more than 1 cr sell orders placed and very less consumed . Means market is waiting for the next technical support zone which is around 4.50

6) in the mean time a new independent director is appointed with immense experience

From these i am still not able to understand what BCG is upto !! Is this a game to grab stocks or really the company is sinking or all the receivables cooked up like others crib in MC forum ???

When is the next nclt hearing in Oct ??

[Logan]

@odysee, the problem is, the market is giving too much importance to Axis and Daum case but according to me these 2 aren’t so big a deal. Even if BCG loses the case against Axis in NCLT, it’s not a big deal as there is PO money to pay Axis. Though the amount is 3 times the amount agreed upon, it won’t make much difference to the operations of the company.

With Daum, the situation is not what it used to be. BCG had 120 crores cash after March quarter and dedicating all that cash to pay off Daum won’t make sense when you have business opportunities (COVID-19 has accelerated digital spending and there’s US Presidential Election this November).

If there was too much impact of Daum on the business then we should’ve worried but it isn’t causing any trouble, the case is not in the courts and BCG gave up Lycos few years back, I don’t understand why the market is giving so much importance to it.

Coming to uncertainty, we can never say there won’t be uncertainties wrt the stock and the company (not just BCG but any other company for that matter) but comparing with the past we have only these 2 issues. These 2 issues are making everyone anxious and there’s too much impact on the price because there are too many shares in the market which is making it easier for operators to manipulate prices. The best way to deal with it is buyback of shares or bring in a stable investor. Dividends are just a temporary fix as it won’t take away shares from the market.

[Logan]

@ramganesh1982, on receivables, compare BCG with its peers like TTD and Rubicon Project (which is now Magnite Inc) to get a better understanding.

TTD’s (2019) receivables are $1.12B and its revenues are $661M (1.7 times), Magnite Inc’s (2019) receivables are $217M and its revenues are $156M. BCG’s (2019-20) receivables are $129M and revenues are $381M. Compared to these 2 companies BCG has way less receivables.

You have to look at payables also to understand the cash flow issues. TTD’s payables are $868M, Manginte Inc’s payables are $259M and BCG’s payables are $13.5M. Here too BCG’s payables are way less compared to the others (those 2 companies receivables and payables are more than the revenues).

I’m not saying BCG is better than these 2 and my point is that many smaller players in the Adtech industry have receivable problems. TTD and Maginte have better cash position as they may not have to pay publishers like BCG does. If the payables stayed with BCG then it’d be in the form of cash and BCG could’ve used some amount for other things (fix outstanding issues sooner).

[odysee]

Thank you @logan. I’m not unduly concerned about the Axix bank payoff either. Or Daum at this point of time as BCG has moved on and the revenue and profits have not been materially adversely affected. Daum will happen-whenever the situation permits.
My greater concern was on the LOC and the loss of opportunity if that doesn’t happen soon. In addition I really do believe that the consolidation would benefit all concerned, both in the near term as well as in the future. Just imagine, one large subsidiary ( encompassing 12), duly audited and certified by an international audit firm would change the image completely , and offer far greater opportunities for expansion of the business, along with unimpeachable credibility.

[odysee]

Sorry, Axis bank.

[tanv151]

With all due respect I beg to differ on the importance of Daum and Axis. Daum and Axis may not look big when compared to revenue and profits published by the firm. However, I strongly believe market is judging SKR’s INTEGRITY, TRANSPARENCY, DECISION MAKING and COMMITMENT towards shareholder by the way he has been handling Daum and Axis issues.

– Court granted receivership of Lycos to Daum; the order also said (from what I recollect) if Daum cannot recover all the money that is due to them form Lycos they can attach other entities as well. Pls correct me if I am wrong?

– In any case, if BCG already gave away Lycos, why is this still open. Why SKR is not saying we gave you Lycos and the matter is done?

– If he sees value in getting Lycos back (but he admitted Lycos is not what it used to be and we have made use of it already) why delay it?

– If the assumption is right wrt making use of 120 crore for business, why was not used in the past for growing top and bottom line? How many opportunities were lost by showing/keeping this amount in reserve?

– If the assumption about 120 crore is right, what is stopping SKR from communicating it?

– What was the need to dilute the equity base by issuing pref shares when he clearly knew he is going for LOC? May be 10 crore out of 120 crore could have been used to repay Axis last year? Have we seen any urgency from SKR in trying to close this loan? What value did he see in raising funds through PO when he knew there is a good chance of getting money through LOC process and work was underway?

– Why the whole PO issue was delayed? Remember the letter was signed by SKR in Dec but the ballot process started only towards the end of Jan?

– What process was used to identify the parties to issue the Pref shares to? Many say ex BCC director is associated with Muskaan Ltd, I couldn’t get this verified but if it’s true, is this a case of ‘I know what you did last summer, so better give my share’? I hope not

Having said all this, SKR is still in a very good position to fix all issues and make BCG a great company both in business world and stock market. He just needs to get a better sense of protecting shareholder’s interest through transparent and timely actions. Eagerly waiting to see that day.

[Rathi_b]

I strongly agree with @tanv151 on this.

[Rathi_b]

We shall ask about it whenever the management agrees to meet us.

[kmr003]

@logan,

You are comparing BCG to TTD, but investors are not even comparing it to Affle or OnMobile, to start comparing SRK should bring back investors confidence,

None of big investors are holding even @1PE, below are few things I observed SRK is least bothered or not even taken single action other than conducting investors conference calls

1) Big private equities offloaded their holding Everest sold 8 Cr no of shares Oaks sold 5 Cr shares –

2) I remember during 2014-15 retail share holding was around 10-12 % now it is whopping 29% and some guys holding 10-12 %
In next 6 to 8 months preferential allotment shares also can be sold in market
i.e another 5%

5) SRK is well known about 40 % of shareholding is not stable

6) None of institutions investors asked questions in last 4 year conference call.
don’t even know who is attending

8)SRK thinks not to spend money on BCG to improve market cap
(this would have done by appointing big 4 for standalone or giving 0.2 paisa dividend or buyback of 2% (4-5cr Rupees) shares from open market )

9) Seems like Investors think it is very hard to change SRK behaviors towards investors,

10) Even SRK knows Axis is in NCLT i.e negative sentiment in market, don’t think he will be priority to settle the issue.

11) DAUM is one more legal settlement, SRK is not able to resolve on time, Status updates are not trusted because of past experience

12) LOC is also in same line, No big investors are confident because of SRK past promises

One thing for sure SRK should work towards to build confidence of investors and improve on credibility/ corporate governance of BCG because reputation of company is is very bad state in market

[ramganesh1982]

Thanks @Logan for adding some clarity . @tanv151 has highlighted the most important aspect imo for the stock to move towards a fair price/stay stable . Integrity is of great importance – b it stock market elsewhere.

[admin]

Guys, @Logan has done enough research in the industry specific things and shared all his knowledge to us. If you expect him to answer corporate governance related issues, then I do not feel comfortable at it.

The MMB gang really want to shut this forum and making a lot of noise. I see a glimpse of it here today. It is hard for me to moderate if things continue like this. I believe that any issues we can discuss in a better way. Price fall affects all, be it you, Logan or myself, but we should maintain calm and try to find solutions for it.

[cvkrr]

Why bcg paying such huge amount to publishers. If it pays like ttd or magnite the remaining funds should be used for business with out dependency on loc,please explain dear logan

[Logan]

@kmr003, what’s wrong in comparing BCG with TTD? I don’t know whether if it’s an apple to apple comparison or not but both those companies are in the Adtech industry. It’s not my problem if some people compare BCG with random companies.

@cvkrr, every company will have its own business model and it depends on many factors. Google, Yahoo and Bing are all search engines but why do they have different business model? Why only Google is dominant?

I really don’t know the day to day operations of these companies so whatever opinions I give you won’t be any good. I think its better to ask the CEO about these.

[Logan]

@tanv151, it seems like you are asking these questions to the wrong person. Only the CEO could answer all these questions. Like you, even I’m a retail investor and just like how you have your own opinions, I also have my opinions on different subjects. There’s no rule saying that we all should agree with each other on all the topics right?

@odysee asked my opinion on uncertainty and I shared my opinion on that subject, it’s simple as that. I’ve mentioned that I don’t give importance to Axis and Daum and I’ve never mentioned that the CEO is doing a good job on delaying these. These 2 issues are having a great impact on the stock price and causing a lot of anxiety and uncertainties but the impact on the business is not big. I didn’t force anyone to agree to my views and opinions. I’ve never said BCG doesn’t have corporate governance issues and in fact I’ve always highlighted that. The main reason there’s lack of trust is because of corporate governance issues.

Coming to your questions,

On Daum,

1) I don’t understand how you can ask me about the court verdict, only the CEO and BCG’s lawyers can answer these questions. In my opinion its mostly to do with the arrangements BCG made with Daum or any other reason which only the management knows.

2) I don’t know what value the CEO sees in Lycos (to get it back) so only he could answer that.

3) I don’t know why he’s delaying it but my guess is that he wants to settle it at once instead of paying in installments (given the history with Daum).

4) Regarding the 120 crores in cash, no company will dedicate all the cash to one thing (be it on business or settling issues) they’ll always keep cash on hand for emergency. 120 crores is a small amount (at least in dollar terms) to have a great impact on the business. When converted to dollars the amount is $16M. If you get a return of $2M putting all the $16M on business or any other thing then that’s not a good move. You always have to keep some amount for emergency purposes.

5) Again, committing all the 120 crores to settle Daum will wipe out entire cash on hand and there won’t be any cash left to run the business smoothly as there’ll be no liquidity at all.

[Logan]

On Axis, PO and LOC

1) I don’t know why he didn’t take out 10 crores from the 120 crores, only person who could answer is the CEO and not me. Raising funds may not be only for Axis, the company has other plans too (a part of it may have gone to pay Daum if they’d considered paying in installments, there’s Mr.Pispathi’s project etc).

2) If he could get LOC why PO? Even on this you should ask the CEO but anyway I’ll give my opinion on this. Axis was very persistent on closing off the loan and they went to DRT and NCLT against BCG so he may have raised the funds needed to close it off sooner.

3) Again, you are asking the wrong person here. I don’t know why it was delayed. If you really wanted to know about this then you should’ve told us to mention about this in the questions list that we sent to the company to be answered in the conference call.

4) Yes Mr.Subrata was a director in BCG and he and others got PO shares. I don’t want to comment on conspiracy theories so I won’t comment on things like why they were chosen. I don’t think there’s any problem with giving preferential shares to friends. Many companies do that all the time, even Tatas got preferential shares in Tata Motors and Idea promoters also got in Vodafone Idea. If there were misdoings then why did SEBI, BSE and NSE all approve the process?

You are showing all your frustrations on me instead of showing them on the CEO. Would you be able to answer these same questions if I asked you?

Please let me know

Why BCG wants back Lycos?
Why is the CEO delaying the payment to Daum?
If he could get LOC why PO?
Why PO process was delayed?

We all may have different opinions on the company and the stock but at the end of the day all we want is good return on our investments. We want the company to be as transparent as possible, we want them to communicate well with the shareholders, we want them to address all the shareholders concerns. We want them to confront the operators who are manipulating share prices.

[Rathi_b]

@cvkrr brightcom is an independent integrated platform like Magnite though smaller in size but catching up. It offers vmp, SSP, dsp and DMP services with its compass application. We are jumping the gun here seriously, let the Oct 9 date pass before we start questioning everything about the company. We shouldn’t panic now even if the price goes further down. I agree it might take sometime but let us talk to the management first. We are preparing for it so please hold your thoughts until that happens.

[odysee]

@kmr003, at the outset please refer to Mr Reddy as SKR as those are his initials. Not SRK.
Please also understand that Oak’s tenure for this particular fund was coming to an end , and they were statutorily obliged to off-load all their holdings as the fund was ‘shutting down’. It’s of no consequence if they perceived the future to be brilliant or otherwise as regards BCG. They had to exit. Period.
Mistakes have been made by the BCG management as regards settlement of dues vis-a-vis Axis, and we all hope some resolution is arrived at , sooner rather than later.
The current owners of Daum or Lycos Inc. have no interest in running that business, and are happy to conclude the settlement with BCG, which would result in Lycos Inc. reverting to BCG on payment of an agreed sum.
I would agree that the retail shareholders of BCG have been treated somewhat shabbily by the management, and that needs to change for the better even though we have seen some signs of positive movement in this regard. Not enough though.
We are hopeful that with the recent restructuring of the Board of Directors, and increasing engagement with the retail shareholders via updates to the Stock Exchanges , trust of market participants can and should be regained by the company.
A company which continues to earn over 8 rupees per share on an annualised basis in a difficult environment doesn’t deserve this kind of disrespect.

[tanv151]

@Logan, I think you posted a comment that I am unable to see now. Not sure if it’s an issue just for me.

First of all, apologies, if my post came across as I am questioning you. That was not the intention and may be I should be mentioned that on my post. As mentioned in my previous posts, I am not here to challenge (let alone attacking) anyone’s view and as you rightly pointed out, everyone is entitled to have their own opinion and it’s not necessary that we have to agree with everyone. I am more than happy to ‘agree to disagree’ and do it in a polite way. I clearly understand only CEO has answer to those questions, so there is no point challenging anyone here.

I am just trying to share some observations through this forum, with fellow investors who have been part of this journey for long enough and hoping these questions will reach BCG management, as this forum has being playing a critical role here. Going by admin’s post, I get a sense that many would have thought my message and those questions were directed to you, my bad, I should have provided better clarity.

I repeat SKR is neither a friend nor a foe of mine, and I will continue to appreciate him for any good work and question things, wherever necessary.

@Logan and others who may felt I was challenging Logan or asking those questions to him, apologies for any inconvenience caused. It is important we all stay together in this journey and provide timely feedback to BCG management to protect interest of all the shareholders.

[Rathi_b]

See understand that all of us hold our opinions but frankly the messages have become too much to handle now. Please let us call it a day now. I request all of you all this not helping our cause now. Call it a day now.

[Author]

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