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LoganRegistered Boarder
Everyone has given very valuable suggestions/queries and I’ve skipped those in my list so that its not repeated. My suggestions/queries are:
1) We appreciate the management’s focus on the operations side of things and we always support them on that but sometimes we feel like the management completely neglect the shareholders. We don’t get replies to our mails and the only time we can talk to the CEO is during the conference calls. Some of us don’t get that opportunity too as the call is only for 45 minutes. So improving communications with the shareholders is very important for the company to gain trust.
2) The company needs to be more transparent as the shareholders are losing confidence in the company as there’s so much manipulation in prices, extremely negative market sentiment and fake information spread about the company on various platforms. All the companies will have people who are positive and negative but with BCG there is more fake information than there is useful information. We would like to know what measures the management has taken to stop these fake information spread about the company.
3) Is it possible to dedicate a portion of the LOC money to buyback shares? Some of us have this opinion that even after resolving all the outstanding issues, we may not see stability in prices as there are too many shares in the market which is making it easier for operators to manipulate share prices. Buying back shares is a great investment when the company (stock) is massively undervalued. Share buyback improves market sentiment also.
4) We have information only about BCG’s subsidiaries like Online Media Solutions (Brightcom), International Expressions Inc (VoloMP) and Max Interactive. We want to know whether all the other subsidiaries are clubbed under “Brightcom” or they operate separately. There’s no proper information on DreamAd Group, Dyomo and FDM. Few subsidiaries’ websites aren’t updated properly (Dyomo) or we can’t find their websites (DreamAd and FDM).
5) We request the management to talk to the particular “group” that holds significant quantity of BCG’s shares. Since their holding is large, we have concerns about their actions.
6) We need a breakup of many items in the balance sheet. There are many items classified as “other” and the loans and advances are very high and there’s no information about them in the footnotes (in the annual report). We need proper details about these items in the 2019-20 Annual report. It is very important for investors (both current and potential) to get all the information about the company in the “Annual report”. We appreciate the presentation sent to us via exchanges about some of these items but the same details should be shared in the annual report too (this was discussed in the recent conference call too).
7) Please provide more information about the operations of the company on its website. Details like the company’s history, all its subsidiaries (with links to their websites), Products the company owns (Compass) etc.
8) Is OneTag part of BCG?
9) We thank the CEO for clarifying about BCG providing DSP and DMP services but we don’t know which subsidiary of BCG provides them (We know that Brightcom is an SSP)
10) The parent company’s revenues are stagnant for many years and we would like to know what plans the management has to bring back growth.
LoganRegistered BoarderThe important topics we should discuss with the CEO is about manipulation in stock prices and not fulfilling few commitments in time (better he should not give any commitments on few things).
He should talk to G group on our behalf. We can’t understand what’s their motive. If it was fewer shares then we wouldn’t have given importance but they are holding significant quantity. They are causing more harm than Oak did.
7+LoganRegistered BoarderLoganRegistered BoarderThe best way to deal with all the confusions is by meeting the CEO and other members of the management in person and asking them questions directly. Unfortunately because of the pandemic not everyone can do it so BCG investors in Hyderabad can help us with it.
We all should make a list of important questions and people in Hyderabad can ask those questions to the management on our behalf.
If everyone is ready then we can start preparing the questions. We can take an appointment with the CEO. Investors in Hyderabad should decide the time and date. As someone suggested few days back, we can start a new thread for that.
LoganRegistered BoarderStock price movements in companies like BCG, subex (G group has invested in subex too) and many others depend on events more than they depend on the business. These stocks are manipulated by operators and they control the prices as per news flow.
(Oak selling made it even worse as it halted the momentum and brought more shares to the market)
BCG lost trust with the market years ago and gaining it back isn’t so easy.
Appointment of Mr.Acharya, CEO buying shares from the open market are good events but their impact is less when we compare with events like Axis (people are scared because of NCLT) and DAUM (people are scared because of the past court case).
5+LoganRegistered BoarderNike’s online business is booming — ‘digital is here to stay,’ CEO says
“Digital is fueling how we create the future of retail,” CEO John Donahoe said.
“Nike’s decision to evolve into a digital-first organization has proved prudent, as the crisis continues to push consumers toward the digital channel,” Susquehanna analyst Sam Poser said. “Digital momentum is sticky. … [And] Nike has embraced the structural shift of consumer shopping habits from traditional brick-and-mortar to digital and will, in our view, continue to capitalize on this shift.”
As more businesses go digital, companies like BCG will benefit a lot (people will see more ads as they spend more time online)
LoganRegistered Boarder@dileepvn, in 2017, BCG wanted to take debt of $150M from White Oak and WO wanted a thorough audit of BCG’s subsidiaries so BCG appointed EY to audit BCG’s Israeli subsidiary, OMS (maybe other subsidiaries too but OMS is sure). The deal with WO didn’t happen because DAUM subpoenaed WO to reveal complete details of the deal and BCG gave up on that because if that deal had happened then WO would’ve had to fight DAUM in courts. Any investor will back away from a court case as their name will be dragged in unnecessarily.
I think that was a temporary audit and later BCG appointed EY as auditors for OMS (full time).
LoganRegistered BoarderWe all know that Axis Bank ots will be paid eventually but the problem is we don’t know when. Our anxiety levels are more now because the case is in NCLT. The name itself scares us because of obvious reasons. (We didn’t have this problem with Canara and SBI).
My opinion is that the CEO should’ve known better on how to address this issue. He also knows how cases in NCLT are seen in the market.
LoganRegistered Boarder@odysee, that’s the problem with the CEO, he always gives timeframes and doesn’t execute in that period. It’s far better to be honest instead of giving random timeframes. If he doesn’t know something (timeframe) properly then he should tell us directly that he can’t give details on when something will be executed. I’ve always pointed this out, corporate governance is very important and the management has to inform shareholders all the time (especially when the market sentiment is extremely negative).
LoganRegistered Boarder@odysee, I think everyone is getting frustrated waiting for Axis to get over. There are too many shares with retailers which makes it easy for operators to do their manipulation. The best way to address this is by bringing in a stable investor or buying back shares.
LoganRegistered Boarder@odysee, programmatic advertising is picking up in India recently and it is not so big as compared to western countries. If you remember, BCG represented Microsoft in India few years back and I don’t think they made any money in that.
For a smaller company like BCG, they’d always look at returns before taking any risks. Bigger companies can invest for many years even without profits because of their size. If smaller companies want to do the same then they need regular investments in the company.
You can see startups gaining more market share because they always get funds regularly.
Who will give funds to BCG just to try something? When the management tells shareholders that BCG wants to enter new market then shareholders will be happy then later if they don’t make any money there then the same shareholders will start criticizing the management.
Startups and private companies can do this because they are not public and their investors will understand the problems.
But with public companies you have to answer to many people, some will understand the problems and others will not. So public companies have to be very careful before taking any risks.
Many companies will take on debt to do something like this and they end up losing a lot of money which BCG has never done.
I read somewhere that GroupM is dominant in digital marketing in India. GroupM is very big and they can test for many years.
Programmatic advertising is very big in the US even with having bigger companies there. Smaller companies can make money there but the same can’t be applied here. Maybe if BCG gets bigger then they’ll start looking at India and other markets.
56% of Affle’s revenue comes outside India. I think even InMobi is doing more money outside India.
LoganRegistered Boarder@Shivashankar & @VALUEBUYER001, I’ll share my views later as I’m working on it now.
6+LoganRegistered BoarderBusiness Related
1. LOC and Consolidation of subsidiaries.
2. Does BCG provide DSP (Display Side Platform) and DMP (Data Management Platform) services? If yes, how big are they compared to SSP (Supply Side Platform).
3. Is Bold-Win part of BCG?
4. Has BCG entered OTT and Connected TV businesses?
5. US Presidential election’s impact on the business.
6. Did Pisipathy Prasad leave the company?
7. Market share in the industry and how well is the company prepared for the future?
8. Does BCG provide cloud computing services? If yes, how big is it? If no, are there plans to enter once all the outstanding issues are resolved?
LoganRegistered BoarderThese are my questions and suggestions.
Market Related / Corporate Governance
1. Axis, Daum.
2. Being a global company, the company lacks transparency sometimes and never replies to our mails and the only time we can communicate with the management is during the conference calls. You can’t expect us to wait for the conference calls to get clarity. There needs to be a big change in the way the company communicates with the shareholders (Also we can’t travel to Hyderabad just to get clarification on few topics).
3. We understand that the company doesn’t want to disclose sensitive information and we are always okay with it but at the same time we need an acknowledgement at least, saying that the company will update the shareholders at the appropriate time. How much ever silly the questions maybe we need the company to reply to our mails, it’s the main thing investors expect from a global company. The sad part is it’s been 8 years since the company came public but still there’s no proper communications with the shareholders.
4. The company has to appoint a board member who has enough experience in dealing with market related activities.
5. We need a breakup of many items in the balance sheet. There are many items classified as “other” and the loans and advances are very high and there’s no information about them in the footnotes (in the annual report). We need proper details about these items in the 2019-20 annual report.
6. We understand that the management doesn’t have control over the daily changes in the stock price but the company has to come up with some measures to reduce the volatility and of course stock price manipulation.
7. In Q4 results, auditor made a remark regarding irregularities in payment of statutory dues and income tax, we need an explanation on that.
8. When can we expect the promoters to buy shares from the open market? This action brings a lot of confidence to investors.
9. Provide links to the subsidiaries’ websites in BCG’s website.
10. We trust the current auditors of the parent company but to bring in more credibility and confidence it would be good to appoint any of the Big 4 to audit the parent company.
11. The company should hold a conference call to discuss business related activities as there won’t be sufficient time to discuss about business in the earnings call as more time will be spent on discussing market related activities.
LoganRegistered Boarder@hw_tw, I don’t think adauth figures are so important, Rubicon Project which is Brightcom’s competitor has a market share of 40.4% but Rubicon’s revenue ($156M) is not even half of BCG’s ($381M). If it did have a big impact then BCG’s revenues should have increased a lot as the market share last year was at least 20-40% less than what it is now.
I don’t exactly know whether Rubicon is a direct competitor but both concentrate on the supply side of things. Also Rubicon and Telaria (which has a market share of 3.7% on adauth) merged to form a new entity called Magnite Inc.
As I always say adtech industry is very complex and we really need to discuss about these interesting things with the CEO so we should ask him to arrange a conference call to discuss the business side of things.
In earnings call everyone’s focus will be on outstanding issues which are also very important.
LoganRegistered BoarderLoganRegistered Boarder@rathi_b, I don’t know much about that either but I can share my opinions on what the company can do to arrest the fall in prices.
I’ve never seen a company’s stock struggling to perform well even after posting great results (that too during COVID-19 times). In fact whenever there’s a positive event the stock actually falls more than it rises. This shows how much manipulation is going on with the prices.
There’s manipulation because the market doesn’t trust what the company’s management says and also there is more supply than demand.
Since many investors don’t trust the company they won’t keep their shares for longer period and they’ll sell whenever there are positive developments so when new investors buy the shares looking at positive developments, old investors sell at the same time and this causes volatility in prices which the operators take advantage of (old investors aren’t long term investors).
To stop all these the management has to focus on creating demand and that demand should not be artificial (there should be material developments). We can see many small cap companies post something positive and seeing those posts the prices will go up and when there’s no material development then the prices will fall again.
BCG’s management is focusing on creating the demand but they are very very slow, compared to last few years, now they are communicating well with the investors and informing us on developments happening. The good part is there aren’t many outstanding issues now, there’s only daum and Axis (all these years there was VC exits, SBI, Canara loans).
Just creating the demand won’t bring back trust in the management (people will still sell shares after positive developments) so the company has to focus on building the trust, they can do it by improving corporate governance and replying to each and every question investors ask through mails (how much ever silly they maybe).
LoganRegistered BoarderGood results by BCG, 11% increase in revenue and 23% increase in profits (YoY).
People may have confusions about growth in eps as it shows an increase of only 14% but that is because of increase in the number of shares (PO allotment).
If we consider the previous shares outstanding then the eps becomes 2.12.
(Due to the cyclical nature of the industry, while analysing, we should always consider YoY instead of QoQ)
LoganRegistered Boarder@odysee,
I don’t think that BCG is limited to SSP side of things. BCG may also provide DSP services but I don’t think it’s as big as SSP.This is what is mentioned in Brightcom’s website
Brightcom is a Publisher Side Platform – Our ‘compass’ proprietary technology and teams of trusted advisers across the globe turn us into an entry point for all the best the programmatic world has to offer. Our focus on the needs of our publishers allows us to offer advertisers premium traffic, quality assurance and exclusive media opportunities
I don’t think that only DSPs and DMPs are better, even SSPs have their own strengths but my opinion is that it all comes down to how good relationships you have with the clients (publishers, advertisers, ad exchanges, ad agencies).
Adtech is very complex and involves many participants, sometimes all appear to be same but when we dig deeper we’ll understand properly.
We compare BCG with only TTD and Affle (because they are more popular and people notice them more because of their stock price) and come to conclusion that BCG is not doing well but if we look at other ad tech companies almost all have struggled. Yume, millennial media, rocketfuel, Marin software, telaria, Rubicon project etc all have struggled and compared to them BCG is far better (business wise).
LoganRegistered Boarder@lycos-rags-to-riches, you are right. The good thing is the management has improved a lot in corporate governance these days (especially 6-9 months). They knew many people didn’t understand the business properly so they started sharing information about the business, clients, BCG’s products etc.
Now they have to improve on timing and communicating through mails. They are sharing everything with the investors via exchanges but they should concentrate on replying to investors mail.
I don’t know what agreement BCG and Axis have made and we all know how greedy the banks can get (personal experience) so I understand why the CEO doesn’t want to pay 3 times the amount that was agreed upon. For the delay in payments there should be a penalty but asking 3 times the amount seems bad on Axis part and also freezing the money is not good.
The company can’t give details on this because there’ll be negotiations on the amount to be paid and they can’t disclose anything to investors because lawyers of Axis Bank will look at it and they’ll use it against the company in the courts so the company has to be as subtle as possible while communicating (sometimes even small details will cause big troubles).
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