[pranil]

Oak impact is not limited to panic selling alone. See other side… no serious investor will like to buy shares now as they are not sure if Oak start selling again. So it’s not only business value that can give right valuation. Management must protect interest of investors… if they don’t, many investors avoid such stocks though valuation is attractive.

[pranil]

Dear Satenna,

Story is same whether it’s Sansar, Everest or Oak. Everyone lost capital and were forced to sell in open market as Mr Reddy could not give anyone exit.

VC funding is time bound and they exit after that time; generally after the maturity they sell their stake to other investor or management. But despite waiting for their full maturity, they didn’t get appreciation of share price and buyers who can buy their stake. So they sold to retailers. When I said Mr Reddy is not sensitive to investors, I meant this. Generally Management bring in new investors to buy VC stake, but it was never in priority of Brightcom… they only focus on business. MT Reddy said he was looking to arrange exit for Everest it doesn’t happen now he had assured us OAk shares will not come in market but it came. Frankly speaking Oak selling 35 L shares created lot of panic; many started predict that all 7% stake of OAK will come in open market and people started selling. If Mr Reddy would have arranged buyer in time, Brightcom would have closed over 14 today.

[pranil]

I remember, Mr Reddy always ensured that FPIs will not sell and these shared will not come in open market. I remember he said it at time around filling bankruptcy… but it happed other way round, we seen all FPI one after other dumped stocks to retailers…seems Oak will follow the same.

[pranil]

Thanks Saul for your detailed reply.

First of all I am sorry I got upset as my posts were not shown, I had tried to post in past as well but my post never published… so I thought this time also it will not be posted.

Further I want to clarify, I am long term investor and invested since 2014-15. I have asked questions in most of the concalls May be you can Verify from the call transcript. So I trust business and management and I want prices to go up. But I am critical of some aspects may be I am not able to convey properly as my question was all over. I will take up couple of very specific issues and back it up with supporting data so that my point is better understood. Will post soon.
Regards
Pranil

[pranil]

Criteo and Trade desk both entered in market in 2016; criteo ipo was priced at usd 31 while that of TDS usd 18. Today criteo is quoting at 12 usd and TTD at 350 usd. Main reason is that criteo did not show growth while TTD is growing at handsome rate quarter after quarter. Growth is must for good valuation

[pranil]

I m wondering why my posts not showing still. Seems this forum is to pump up the prices only. Every one says I am not recommending to buy but then they don’t allow any criticism or different view. May be because it risks exposing negative side of company

[pranil]

Dear Admin, I hope you post my post… there is view that you allow only positive view about company and management. We should be fair, praise them for good dids and criticise for wrong. After all our intention is to maximise value for us. Why a longterm investor is critical of management? Is it because he want people to sell shares?? Only to create positive pressure on management to hear investors

[pranil]

Hi Saulmate.. few points I want to highlight.

Bcg’ growth in last 5-6 year is flattish in USD terms.( this is despite they reinvested almost 1000 cr in business from their profits) While all the companies you have mentioned are growing much higher some of them above 50% cagr. I understand market values future and that’s why high growth rates are important.

TTD or Affle though have/had lower sales, they continued growth and never gave any cashflow issues for limitations to growth. We try to get convince that BCG’s problem of cashflow will be resolved after LOC… firstly who was stopping them to get LOC 6 years back? Does it not show as management didn’t evaluated this option and shareholders suffer for this?

If people in india can understand Affle business model and they don’t understand BCG’s who’s fault is this?? Shareholders? Investors? Or managements?

One more important aspect considered for valuation is promoter track record… unfortunately none of investors made profits in BCG, infact almost everyone lost capital. So there is impression that they are insensitive to shareholders.

You can see one more company in this field apart from TTD and Affle….Criteo… see the gap in their Valuation; this is only due to growth rates. Plz note criteo had no valuation issues few years back but despite that their growth is flat and you see they valued at 5 PE and TTD at 145. So we miss the business model/technology factor, some company has superior technology and they grow faster than others… cash to burn is not only one constraint.

Off course BCG deserves better valuation but if valuation be at 5 PE, 50 PE or 150PE will depend on the growth rates and how sensitive is management towards investors. Keeping my fingers crossed.

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