[odysee]

Just to set the record straight @lycos.rags.to.riches, Mr Reddy mentioned about the arrangement with a potential investor/investors for the Oak holding in January of 2020. Then COVID came along and unsettled the world.
SKR did mention in the conference call preceding the September call, that the old arrangement was becoming unstuck and he was trying to get Oak to offload the stock in an ‘organised’ manner to avoid undue disruption in the market. That unfortunately didn’t happen and Oak must have rushed to sell when the price suddenly moved up to around 12.50/13 which was possibly above the agreed price in January, which value may have been higher than the then prevailing market price but nowhere near 12.50/13.
Circumstances prevented an orderly exit, and Oak must bear some of the blame for being opportunistic even though they were optimising their ‘return’ ( reduced loss on investment) to the extent they could.

[odysee]

Thanks for your thoughts on this matter @Logan.
But ,surely , by this time the BCG management should be crystal clear on the path to take. If the in-principle approval for the LOC was received a few months ago, and SKR stated in the conference call that his expectation was that the LOC would be in place by August but didn’t happen because of the final pending issues of the recipient entity, as well as other potential lenders wanting to get on board the consortium of lenders, surely by now ( mid October) the matter would have been resolved.
And I agree that the BDO report should not be made public. Just a clarification that they are still retained and undertaking an audit or helping in the ( now stalled) consolidation.
The shifting stance and poor communication is very unsettling.
I am sure many investors on this forum have also held senior management positions as well as worn the CEO hat in large public enterprises.
I repeat what I had stated in an earlier post – your word is your bond, Mr Reddy, and you must soonest inform your shareholders if any shift takes place which is at odds with what you had conveyed earlier. The long term investors hang on to every word you utter and usually try and give it a positive spin to calm their minds and frayed nerves.
Will they ever be rewarded for their faith and patience and hope?
Or will Tomorrow ( things will get better) never come.

[odysee]

The last conference call didn’t address many issues and numerous questions and queries remain unanswered, as it was too short at 45 minutes (stretched to an hour).
My concern is the lack of reference whatsoever to BDO and their status. If they had been engaged a few quarters ago, what is the outcome of their efforts? Was it only to assist in the consolidation? But that is now “on hold” as per Mr Reddy. Why? LOC directly to the main holding company? And not to the new entity comprising the 12 subsidiaries? Surely all this was discussed with the potential lenders well before the exercise even commenced. And BDO was appointed many moons ago.
To conduct the audit also? Or not?
There is no clarity or confirmation as to whether BDO International is still in the game or not. If so, what was the mandate?
Has that been modified?
I would request Mr Reddy to be transparent on this issue and provide an update to the shareholders as the ‘inflection point’ has now become a moving target.
I am not clear if the investor team that met with SKR on the 5th of October touched upon this matter or anything else related to it.

[odysee]

Good time to accumulate and add if resources permit 😊

[odysee]

Would anyone like to speculate as to why the g group continues to accumulate the stock? What is the likely end-game?
What purpose is served by continuously keeping the price at these levels over so many years? Surely even they would like to see the stock trading at a more realistic price to generate wealth. They can’t really sell in the market even at double today’s price as their holding cannot be absorbed.
Do they hope to pressurise the promoters ? But to what end and what would they achieve?
If they let the price move up to around 35/45 levels, then they can (maybe) off-load some or most of their holdings to a strategic or some institutional investors and make significant profits in the bargain.

@Rathi_b, do you and your fellow investors who met with SKR have a sense of the likely scenario being built up?

[odysee]

@VALUEBUYER001, this whole exercise of consolidation was started many months ago to facilitate the granting of the LOC against the consolidated receivables of those 12 subsidiaries, and to be able to capitalise on the expected frenzied activity in the digital advertising space prior to the US Presidential elections with the additional funds on call ( and to pay the settlement amount to Daum).
What the heck happened?
Apart from the expected clarification – “these things take time”, no cogent explanation has been put forth by the management. The US elections will be done and dusted, and so will the opportunity of capitalising on the hugely increased demand.
This ‘almost done’ saga is becoming tiresome, repetitive and frustrating, apart from eroding the trust and confidence of all those who have long admired and shown solidarity with Mr Reddy.

[odysee]

@Rathi-b, just to clarify, is the conference call only amongst the three of you investors tomorrow, or with someone from the company too?

[odysee]

@Rathi_b, we are hoping that you will get answers to most questions and queries, and not just a few.
Good luck and best wishes.

[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.

[odysee]

Sorry, Axis bank.

[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]

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.

[odysee]

@admin, if another question may be considered by the visiting group of 3.
Mr Reddy mentioned at the last conference call that there was some deliberation by the credit providers, whether the LOC would be granted in the name of the listed holding company, or whether to the consolidated subsidiaries under a separate new company which would be fully owned by BCG.
If the LOC is granted to BCG itself, then would the idea of consolidation of the 12 subsidiaries be dropped?
That would be unfortunate, as Mr Reddy had highlighted the benefits of a clubbed entity, with just one set of accounts to be prepared and audited for those subsidiaries, apart from BCG of course. Better for presentation and easier for investors to understand is what he had stated. Easier for a possible overseas listing too, in my opinion.

[odysee]

@logan, I only hope that the LOC saga is alive and in progress, and no material setback has occurred that has resulted in this delay.
Getting additional funds ( whether through a line of credit or otherwise) is critical to the well-being of BCG and its stakeholders as we are fully aware.
A reassurance from the management on this aspect would be truly desirable.
If the meeting arranged through the good offices of Admin does fructify, that would be a tremendous confidence building measure.

[odysee]

@lycos.rags.to.riches, I presume that all of us on this forum genuinely believe that BCG is a very valuable company , well positioned in the ad tech industry, operating internationally, reporting substantial revenues and profits, but grossly undervalued.
One would have thought that after all those professionally prepared presentations in US dollars just a few months back, and the analyst’s report, investors would flock to this counter to grab what they could.
What happened?
The other point I wish to make is that if investors were found to buy the stock at Rs 10 per share by way of a preferential allotment when the stock was quoting at less than half that, why would it be difficult for Mr Reddy to convince potential investors to buy now at a 40% discount to the preferential price? Have the future prospects changed? Is the business shrinking? Is the profitability compromised? It would appear not, based on the previous conference calls and results published and huge growth in client numbers.
An upper circuit at Rs 13.02 is justified.
A lower circuit, with very large quantities on offer at Rs 6.10/6.15, is not.
What gives???

[odysee]

What a sorry state of affairs @Logan. From bubbling optimism at the start of 2020 to this current miserable sense of pessimism. Buying only 200,000 shares from the open market is a pittance and will in no way generate any enthusiasm for the retail investor.
And the inability of the management to stick to ‘commitments’ made in conference calls is actually soul-destroying, when it happens time and again.
‘Your word is your bond’, and you honour it, come what may.
When important strategic business decisions are taken, and regular updates have been provided ( LOC, and Consolidation of subsidiaries to facilitate that), it is bizarre to suddenly hear that this critical operation is put on hold after months of toil and effort for some vague reasons that are very difficult to comprehend.
I would happily stand corrected ( and with a sigh of relief) if my understanding is muddled and confused. Would truly appreciate your response.

[odysee]

Sateanna, I wonder if Mr Reddy would be willing to have a meeting over Zoom with a restricted number of investors or even one key member of this forum.

[odysee]

Endless saga Valuebuyer001. July 3rd ( date correct?) conference call… re Axis Bank..”it’s a done deal”. Nothing to worry about.
Same statement and reassurance regarding Daum..”it’s a done deal”. Nothing to worry about.
I’m not worried, thus far. But should one be?

[odysee]

Without meaning to ruffle any feathers, would any forum member like to hazard a guess or reasoning on the stock movement, volume and price action in the market? What calamity has befallen BCG for this situation to arise in our markets? I am puzzled by this irrational and frustrating state of affairs.

[odysee]

The opportunity to buy from the open market could well arise if Axis is settled and paid. That would vacate the ‘freeze’ on the preferential issue funds. And maybe the company can return a portion of the money to Mr Reddy.

[Author]

Posts