[Logan]

Q1 results was good. They missed the guidance on revenue but did better in net profit (and eps). For me, the surprising part was the 50 odd crores revenue from digital marketing/online advertising segment in standalone numbers (not from software development). I think this was the first time in ages they reported such numbers in standalone. Hope this is not a one time event and this continues in the future too. I’m not sure on profits (9+crs) as there’s other income of 4.22crs and dividend from subs of 4.12crs.

I’ll start preparing queries for the conference call and share it here at the earliest. Let’s put more pressure on them this time. I request investors who get the chance to talk to them in the conference call to ask tough questions and don’t let them give excuses.

[Logan]

@odysee, as they say, You can’t teach an old dog new tricks, this applies perfectly to BCG’s CEO/ promoters/management. Everytime they will say that going forward they will take governance (very) seriously (including compliance, communication etc) but they fall back to their old habits.

One thing that is guarantee is that the CEO/management/promoters screwing things up and shareholders paying the price for that. Sometimes they screw things up because they’ll be too lazy or they’ll not have any seriousness towards the market or shareholders. The CEO is someone who I think doesn’t like when anything negative is said about him or the company but he will always do things that bring negativity. Even in the recent auditor resignation, the company is saying that it’s in the best interest of all the parties, especially for the company. I don’t know how it’s in best interest of all the parties.

It’s good if the CEO is optimistic and positive about his company but sometimes being too positive will make people delusional. Issuing bonus shares twice in one year is a good example.

Just saying something is good or better won’t be enough and they have to do things to prove that. Everyone is waiting for material developments and tired of hearing the repetitive talks in every conference call.

First step is acknowledging their mistakes and acting on it. I think the main reason he won’t do buyback is because doing that will prove that he was wrong to issue so many bonus shares.

Like I said in one of my previous posts, we should be aware of what type of company we have invested in, the culture of the company etc. I think right now it’s mostly like a private company where they do things as per the CEO’s interests. If his mood is good, they’ll share all the updates and if his mood is bad then there’ll be no updates for months.

Every shareholder is interested in quantum computing, AI, audio ad etc but there are more important pressing issues like FA, SHP and decline in company’s valuation to worry about and obviously the management should dedicate more time to discuss these and sort these out but by the look of it we can feel that they are least bothered about it. This attitude is what’s hurting the company’s valuation and making shareholders anxious. They procrastinate everything and that leads to decline in company’s valuations. Like I’ve said before, companies with bigger issues are having better valuations than BCG.

I don’t know when they’ll take matters seriously and act on it.

[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.

[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]

@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.

[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.

[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.

[Logan]

Check the latest developments happening in MediaMath company, once hailed as one of the best adtech companies, it filed for bankruptcy and owes lots of money to its creditors. Since the day I started writing in this forum, I’ve highlighted how hard surviving in this industry is and when I talked facts, some people called me paid agent, others said I write too much and that everybody should be careful about me etc. I seriously don’t understand why someone would hate anyone just because they don’t agree with them. It’s simply a waste of time to hate someone and not to concentrate on important things. I’m not someone who will highlight only the positives and give crazy targets like 100 or 1000 or 100 PE or 1000PE. I’ll talk about things which are important. Some people hated me because I supported the CEO few times (mostly on things related to business) but the thing is I’ve been more critical on him on few things (like corporate governance) than others have been but people see only the part where I supported him. Also, I didn’t and don’t blindly support the CEO on everything and will look at the whole picture before coming to conclusion.

Please read some comments made about Mediamath, adtech industry etc in few recent articles and tell me whether I was wrong anytime (past and present).

But much of the damage had already been done; Sizmek had struggled to effectively adapt to the burgeoning programmatic space in the years leading up to its acquisition and had made a handful of what adtech industry veteran Ari Paparo called “small, crappy acquisitions” of other DSPs that didn’t aid its success. In the spring of 2019, the company filed for bankruptcy – a development that rattled the digital advertising world and one that some blamed on Nguyen’s leadership.

Though Vector Capital eventually sold Sizmek for parts, with its DSP and data management business going to Zeta Global and its ad server and creative tools snapped up by Amazon, some in the industry didn’t forget Nguyen’s role in the fiasco.

“When [Nguyen was appointed CEO of MediaMath], I thought it was crazy that a struggling adtech company would go hire a CEO from the recently bankrupt Sizmek, which is one of the biggest adtech corporate disasters of our space,” says Shiv Gupta, managing partner at U of Digital, a digital marketing education firm. “History has repeated itself — [we] should have seen it coming.”

There were warning signs along the way that MediaMath may be struggling to secure the financing it needed. With no M&A action in the works, the company took out a $175m line of credit from Goldman Sachs in 2017. Then, in the spring of 2022, just three months after Nguyen’s appointment following the exit of MediaMath’s original CEO Joe Zawadski, private equity firm Searchlight Capital agreed to pump $150m into the company in exchange for a controlling stake. (Searchlight had already invested $225m into MediaMath in 2018.) Many of MediaMath’s early investors, and even Zawadski, lost their equity in the company.

“MediaMath was somewhat of a bellwether for macro trends as well as some misguided but well-intentioned decisions,” says Jeromy Sonne, an ad industry veteran and the chief executive at AI ad agency Daypart.AI. Most importantly, however, “there was a mountain of debt that was really hard to get out from under,” he says.

On the subject of fiscal responsibility, this episode underscores the harsh reality of the ad tech market. Companies must constantly adapt, differentiate themselves and secure sufficient resources to survive. Failure to do so can result in being squeezed out, as MediaMath unfortunately discovered.

The downfall of MediaMath serves as a poignant reminder of the criticality of cash flow management and credit monitoring in the ad tech industry, particularly in the face of persistent inflation and the end of easily accessible funds. As companies that previously relied on equity now turn to debt financing, it becomes imperative for ad tech businesses to showcase profitability, effectively manage risks, and embrace revenue diversification to ensure their continued success.

“Hindsight is 20/20 and it’s easy to say after the fact that their PE partner led them into a trap but, unfortunately, this is a common issue in ad tech,” said Nick Carrabia, evp at OAREX, an invoice factoring company. “Companies are blinded by valuations, cost of capital, and dilution but overlook other risks. Predatory finance partners are everywhere, make sure to read the fine print and know who you are getting into bed with.”

MediaMath missed (and dismissed) multiple opportunities to get acquired, took late-stage investments that led to a disastrous restructuring and made business bets that didn’t pan out, including that marketers would bring their programmatic media buying in house en masse.

Till now, the CEO and his team have taken mostly good business decisions (except merging with LGS). They won’t take unnecessary risks or buy something just for the sake of it or take debt (they are too conservative on debt which is a good thing but not conservative enough on equity dilution which is a bad thing). If you take loans, acquire companies just for the sake of it, and don’t worry about correct capital allocation then eventually your business will fail (like what happened with MediaMath). There were many events which would’ve resulted in BCG going the same path – like concentrating on Lycos instead of starting Brightcom programmatic advertising (Sizmek started it too late and was bankrupt later), taking on debt (LOC or other) and suffer later (especially since the last 18months where interest rates have gone up a lot). LOC terms won’t be friendly and you’d have to compromise a lot and banks get the final say and not you. Even though it took long to pay off all the debt, BCG’s team did the right thing and took a balanced approach where they didn’t let the debt harm the business.

Even now, had they acquired Mediamint or audio assets of Consumable Inc just for the sake of acquisition then it wouldn’t have worked (both valuations were based on bull market valuations). Some people were saying that only if BCG acquires any company, it will get good valuation but they don’t understand the complexities of many issues. MediaMath too acquired many companies and look where it is now? If doing only acquisition resulted in good valuation then every company would do that but is that the reality? Why did MediaMath fail even after acquiring many companies? I also agree that the way the CEO handled the communication part of the acquisitions was bad but he took a good decision in not acquiring Mediamint or audio assets for bull market valuations. What if you bought both the companies using all the cash and they failed later? Acquisition is one part but running those companies (along with your own operations) is another. To complete both the acquisitions, BCG needed more than 1250 crores and all the available cash would have to be spent on that and later to run those companies (working capital or for day to day operations) you’d again have to raise money. So you have to look at diluting your equity or take debt. Now interest rates are high and taking debt is not a good idea.

The above mentioned are one part and the other important part is the cash flow issues in the industry which is mentioned above (and mentioning again below)

On the subject of fiscal responsibility, this episode underscores the harsh reality of the ad tech market. Companies must constantly adapt, differentiate themselves and secure sufficient resources to survive. Failure to do so can result in being squeezed out, as MediaMath unfortunately discovered.

The downfall of MediaMath serves as a poignant reminder of the criticality of cash flow management and credit monitoring in the ad tech industry, particularly in the face of persistent inflation and the end of easily accessible funds. As companies that previously relied on equity now turn to debt financing, it becomes imperative for ad tech businesses to showcase profitability, effectively manage risks, and embrace revenue diversification to ensure their continued success.

When I supported the CEO and said that this is a complex industry, people rejected that and said it’s a sunrise industry and the CEO is making things up etc but did MediaMath made things up? Is it lying about its bankruptcy? Many companies went of business during 2013 to 2018-19 where they couldn’t adapt to the changes happening in the industry and mostly because of the pandemic some improved and I’ve been saying this since years. Companies must constantly adapt, differentiate themselves and secure sufficient resources to survive. This is very important in future also. That is why I always say that tech companies like BCG should never pay dividends (if they pay then pay very less amount). Paying dividend is a temporary solution which may or may not make a difference. Ultimately, if things are cleared, the company will be valued based on its business and its strengths and not on how much dividend it paid.

As investors we should look at both business and valuations. Some look only at valuation and try to bring the perception that things like Lycos, acquisitions at any price, LOC, dividends etc are more important than business. It’s true that both the valuation and business of the company are where they are because of the CEO. He took many bad decisions which harmed the valuation but he took good decisions also. MediaMath episode also shows us how important the role of CEO is. Some investors wanted the CEO to step down and the company to appoint a new CEO but that will not be a good idea, especially when your business is in this industry. CEOs should have tech mindset and should understand ground reality. For example – any other CEO would’ve concentrated more on Lycos than on the business and they wouldn’t have started programmatic advertising earlier than others and would’ve started only after it came mainstream but Mr.Reddy did the opposite. It is this type of judgment that will ensure that the business will survive.

I want to clarify my stance on acquisitions – some acquisitions made at the right time will be very useful like buying OMS etc but done at the wrong time at wrong valuations will be very bad. I’m not an expert on these things as I don’t know the ground reality and I’ll give the management the benefit of the doubt as they know what’s going on in the industry.

My request to everyone is that please don’t get influenced by both positive and negative influencers. Positive influencers will give crazy valuations and will look only at valuations and not care about the business and negative influencers too will highlight low valuations of the company and not talk about the business. Both will misguide you. Please study about the industry regularly and see how the industry is progressing, read articles, follow other companies, check their results etc. If you have doubts then approach the management and if they don’t respond then approach SEBI.

[Logan]

Some guy on Twitter posted about BCG, sharing random observations mostly about standalone numbers. The parent company (standalone) takes loan from its subsidiaries and not from banks hence the interest amount is low.

Looks like his only agenda was to find faults in the company so he forgot to check all the details properly.

If you refer Online Media Solutions’ (Israel) audited reports, you will find that the company (OMS) will not charge interest for the loans given to the parent company (BCG). This audited report was prepared and signed by EY.

On November 2019 the company signed an agreement with its Parent that effectively as March 31,2018 the company will not charge the Parent an interest for the loan.

On receivables of the parent company, the CEO said that they work with many governments and the receivable cycle there is big. Though it’ll be good if the parent company also grows and improves its business, most of the good stuff the company does is in its subsidiaries. I don’t know about others but I consider the standalone/parent company as a holding company.

Funds raised in India have been given to subsidiaries because there’s no use in keeping the funds here as all the important business is done by BCG’s subsidiaries. If they keep funds in the parent, they simply have to put it in FD or invest in some mutual fund. BCG is not a mature company to do that or the situation isn’t like there are no opportunities in the market. As everyone knows, there are plenty of opportunities in the market. Don’t forget, there are threats too like AI, privacy laws etc.

Subsidiaries have taken loan but not paid back to the parent. Well, the above points answers this also. The need for cash is in the subsidiaries as they do most of the business. It’ll be prudent to keep the money where it’s required. It’s not as if the parent company has taken any loan and gave that money to its subsidiaries. BCG is a debt free company and also all its subsidiaries are debt free.

Like he has mentioned, I’ll also mention the same. It’s your hard earned money and you should do proper research. Don’t get influenced by people seeking attention and who are biased one way. If you have any confusions then approach the management and if they don’t respond and if you feel they are not honest then approach SEBI. Don’t trust people who just look at one or two pages and act as if they know the entire history and operations of the company.

[Logan]

@admin, these are my queries for the conference call. Please review once and send them to the IR.

To the CFO, Mr.Narayan Raju

Thank you for giving clarification on the recently published article about the company.

-When will you upload the audited results of other subsidiaries like Dream Ad Group, Max Interactive, Get Media etc?

-The auditor has commented that the Company is not regular in depositing undisputed statutory dues including TDS and Income Tax as applicable to it with the appropriate authorities. Can you please explain on this? The total amount is little over Rs.200 crores.

-What’s the update on Lycos deal with DAUM? What financial difficulties are you facing to close the deal? What is the settlement amount?

-We have requested the company multiple times to give more details on balance sheet items like other assets, other liabilities, other receivables etc in the annual report but the management has not taken that request seriously. It’s very hard for investors to know or understand what these items are and we can’t wait till the conference calls. We request you to take this seriously and provide detailed explanation on the many balance sheet items in the annual report. Everyone will refer the annual reports to know about the company’s business and financials and the annual reports should be very informative. If they’re not informative then it’ll lead to speculation and misinformation.

To Mr.Peshwa Acharya

-We were excited when you came on board and were made the president of group strategy. We request you to use your expertise in helping the company achieve its true potential.

-Because of forensic audit, SHP and other issues, there’s a lot of negativity about the company. How will you address this and make the company more transparent and investor friendly?

-You and the CFO, Mr.Narayan Raju, were appointed by the board to close the Lycos deal but that is still not completed yet. Why is it taking so much time and what are the challenges? Other companies close deals like this without any issue but we are seeing this only in BCG.

-In the last call you said that you had spoken with a few analysts and institutions. What developments took place after that? Did they raise concerns about the company? Why don’t we see their active participation in the company? What plans do you have to onboard more institutions and fund houses?

-Why doesn’t BCG sponsor events like Digiday Publishing Summit, Adexchanger Programmatic IO, MWC, DMEXCO etc? Even smaller companies sponsor events like these which will help them add more clients and attract talent. (BCG participates in these events but doesn’t sponsor)

To the CEO, Mr.Suresh Reddy.

We have trusted you and supported you through thick and thin and will continue to support but we feel we have been let down by the management because of the recent developments. We appreciate your efforts and hard work and request you to take the valuation of the company as seriously as you take the business. We wish you and everyone at the company the very best.

We request you not to skip any of the following queries as these queries have been prepared keeping all shareholders in mind. Addressing these queries will bring more clarity to shareholders.

-Did you reply to SEBI’s show cause notice (SCN) against the company? What developments have happened after the SCN? Did you appeal at the Securities Appellate Tribunal (SAT)? What potential actions will SEBI take against the company? Should we be worried about the future of the company?

-Why didn’t you report the correct shareholding of the promoters for years? Will you get back those shares which were sold by the lenders?

-You allotted warrants/shares on a preferential basis in 2020/2021 to many people at very low prices. These traders didn’t care about the company or its shareholders and they have made hundreds of crores of profits at the expense of retail shareholders who trusted you and the management by putting their hard earned money. Had they not dumped their shares, the stock price wouldn’t have been at these levels. Why did you give them such a huge quantity of shares?

-There are many lapses from the company’s side which SEBI has highlighted in the SCN. What actions have you taken to rectify those?

-Why did you give shares to the current auditors and then select them for the next 5 years? Won’t it cause a conflict of interest?

-What if SEBI bans you from being a director in a public company for 3 years and removes you from the posts of CEO and chairman? What plans do you have if that happens?

-Why don’t you consider buying back shares or doing ESOP? These steps will not only increase the morale of shareholders, but also decrease the huge supply that’s been created because of dumping by PW allottes and bonus shares.

-Giving shares to employees/management team (ESOP) will show that the company feels it has a good future and that the employees/management are committed to the company’s future and its growth. Why aren’t you considering this?

-Other companies have acquired or have plans to acquire companies without any issue but in BCG’s case, you always say that the acquisition is almost complete but change all the plans at the eleventh hour. Why does this trend repeat at BCG often? You said you wanted to acquire Mediamint but changed the plan later, same with the audio ad company, which was later changed to a JV (with Consumables Inc). Were you ever serious about both the acquisitions? We understand that acquiring companies is not that simple and sometimes the valuations won’t work out but why don’t you keep the information private and announce to the public, shareholders and the market only when you are sure that the acquisition will be complete? We had a lot of hopes on Mediamint and the audio ad acquisition deals as they would’ve brought a fresh change but now we are disappointed with the outcome of both the deals.

-Did forensic audit play a role in not acquiring Mediamint or audio assets of Consumables Inc? Or did Mediamint or Consumables Inc cancel the plans to get acquired by BCG? Who initiated the change in plans, was it BCG or the other parties?

-Why is there a lack of information on BCG’s subsidiaries like Frontier Data Management Inc (FDM), International Expressions Inc (IE), Dyomo, DreamAd Group, Max Interactive? Can you give more details about these companies, like their employee count, products and tools used by them etc? We can hardly see their presence on the internet, like they don’t have websites or not present on platforms like LinkedIn etc. Are the employees of these companies under the parent company i.e. Brightcom Group or those subsidiaries have their own employees?

-How many direct and contract employees are there in BCG and its subsidiaries?
-You acquired AdDynamix, and later renamed it to Pennyweb Inc but after that there’s no information about that company. Can you please explain about this and also the structure of BCG’s subsidiaries?

-Can you provide details on Dyomo’s business and the products used by the company?

-You raised money from FPIs to acquire companies like Mediamint etc but those plans have changed now. Are the FPIs okay with the company not making any acquisitions? What was the use of raising the funds?

-What are the threats to the company from things like AI, ChatGPT, decentralized Internet etc? Have you made investments in these fields?

-You keep saying that you’ll improve communication with investors but we’ve hardly seen any improvement. The phone lines that you started for investors a few months back were good initially but now we’re not getting any response from the IR team.

-Why is it taking so much time to close the Lycos deal with DAUM? Many other companies have acquired or sold companies or made more deals in this time without any issue but this one issue is taking so many years to close. Is the management serious about this or will this have the same fate as your other acquisition plans, that is, canceled or changed at the last minute?

-You mentioned in the past about the bandwidth of the management getting stretched. We understand that your job is highly stressful and that you are putting your best efforts in running the company. Why don’t you hire experts who can help you in this? This will benefit the company and you personally.

-Why doesn’t BCG follow the model that other tech companies follow, like having a CTO, COO, etc? Hiring people suitable for those positions will take load off the management and bring more clarity on the operations of the company.

-Why doesn’t BCG sponsor events like Digiday Publishing Summit, Adexchanger Programmatic IO, MWC, DMEXCO etc? Even smaller companies sponsor events like these which will help them add more clients. (BCG participates in these but doesn’t sponsor)
(Same query was asked to Mr.Peshwa Acharya also but we would appreciate if you share your thoughts on this)

-You had reported that the company had appointed EY as the internal auditor but as SEBI pointed out, that wasn’t the case. Can you please explain this?

-When will you start the JV with Consumables Inc? Is it put on hold or cancelled as we haven’t received any information on this from the company?

-Are there plans to start JV with other companies?

-In the recent update (press release) you have mentioned that appropriate announcements will be made when inorganic transactions are considered or consummated. Are there plans for inorganic acquisition?

-Though there was a good overall growth, the profits for this quarter compared to last year’s Q4 was almost flat, what is the reason for this? What level of growth rates should we expect in FY2023-24?

-Why was the dividend per share decreased compared to last year’s? It would’ve been better if you had paid less dividend last year and increased it this year instead of giving more last year and less this year.

[Logan]

The recent article by moneycontrol is biased and poorly researched. They still haven’t checked properly and saying that BCG’s subsidiaries’ financials are still masked. After SEBI order BCG has shared audited reports of its major subsidiaries and those reports aren’t masked now.

Parent BCG maybe an export oriented company but its subsidiaries are not. They’re making money in their own country and BCG’s subsidiaries are not exporting services from India.

Standalone is less and consolidated is more because the standalone is more like an holding company.

About profits shrinking in 2019 and 2020, BCG did impairment and everyone knows about it. Why it was reported in balance sheet (other comprehensive income) and not in profit and loss, let the company answer to SEBI.

When it comes to “other” items on balance sheet, I have also criticised the company on this. It’s good that it’s highlighted and the management looks at it and provide proper details. Looking at the subsidiaries financials may give some idea though.

About company not paying off loans, everyone knows about it and understands it. Pointing it out after 2 years looks clearly biased in my opinion.

About tax, TDS etc, we should ask about the same in the conference call.

Same Moneycontrol had shared another article last month which was very informative and unbiased. I really liked that article as the author clearly mentioned the difficult situations that companies face while accessing technological changes.

The author any bias mentioned this in that article.

While SEBI has attempted to portray the issue in black and white and draw clear lines, the question is whether these issues are as clear and precise as SEBI has made them to be? Moreover, has SEBI used the benefit of hindsight and used the advantage of developments occurring later to judge on decisions taken by management earlier when the matters were uncertain?

SEBI alleged that not only BGL should have informed the exchanges of this material development much earlier, but should have also accounted for the impairment losses too much earlier.

These issues are noteworthy because SEBI has, perhaps for the first time at this scale, treaded the waters of the relatively new accounting rules – the IndAS. The IndAS are not merely recent. There are several areas where business judgment and even discretion is involved. For example, when can asset be said to have reduced in value, requiring write off or impairment?

Timing Matters, Subjectivity Too

Though there are certain guidelines to determine whether impairment has taken place or not, the matter still also requires peeking into the future with the eyes of a businessperson. This not only brings business judgment in the picture, but a level of uncertainty and even subjectivity. The same facts could be viewed differently by a different set of persons. Worse, if the same matter is viewed much later when many uncertainties are resolved, the answer may change.

However, the question is whether a person, having a different business judgment or having a different view on the uncertainty or having the benefit of knowledge of these later developments and thus hindsight wisdom, pronounce whether the earlier decision was bonafide, wrong or even fraudulent? Thus, the present case is a good example where not only these new accounting principles have been examined, but even interpreted by SEBI. It thus initiates the debate on this and the beginning of an enriching discussion on IndAS and even the law on this aspect.

The fact that these accounting principles were in the context of a cutting edge infotech company, where even the management is dealing with very fast changes, makes it more interesting. In this case, BGL has effectively said that, at that particular point, it was confident that the new privacy laws could be duly dealt with in their products/services through modifications, where required.

Here again, then, the question is if this judgment is proved wrong later, can it be said to be not bonafide or even fraudulent? This again is a subject where there will be more and enriching debates.

See the differences between today’s article and the old one. And look at the timing too. Even in other article yesterday by other website, they had mentioned only the standalone results and said that ebitda increased some 20 times etc but clearly missed reporting the consolidated financials. I don’t know what they get from being this biased. No one should hate any company this much. I know there are many flaws in the company and the management should fix that. Also, these people who write these articles should at least reach out to the management before commenting.

Also, the management should take responsibility for the current situation of the company. They don’t care about all these and at the end the people who suffer are shareholders. They have to wake up at least now and fix all the issues.

[Logan]

@admin, these are my queries for the conference call. I’ll add more queries once the company publishes the results.

To the CEO, Mr.Suresh Reddy.

We have trusted you and supported you through thick and thin but we feel we have been let down by the management. We request you not to skip any of the following queries as these queries have been prepared keeping all shareholders in mind. Addressing these queries will bring more clarity to shareholders.

-Did you reply to SEBI’s show cause notice (SCN) against the company? What developments have happened after the SCN? Did you appeal at the Securities Appellate Tribunal (SAT)? What potential actions will SEBI take against the company? Should we be worried about the future of the company?

-Why didn’t you report the correct shareholding of the promoters for years? What was the reason for not disclosing it for years and keeping shareholders in the dark?

-You allotted warrants/shares on a preferential basis in 2020/2021 to many people at very low prices. These traders didn’t care about the company or its shareholders and they have made hundreds of crores of profits at the expense of retail shareholders who trusted you and the management by putting their hard earned money. Had they not dumped their shares, the stock price wouldn’t have been at these levels. Why did you give them such a huge quantity of shares?

-There are many lapses from the company’s side which SEBI has highlighted in the SCN. What actions have you taken to rectify your mistakes?

-Why did you give shares to the current auditors and then select them for the next 5 years? Won’t it cause a conflict of interest?

-What if SEBI bans you from being a director in a public company for 3 years and removes you from the posts of CEO and chairman? What plans do you have if that happens?

-Why don’t you consider buying back shares or doing ESOP? These steps will not only increase the morale of shareholders, but also decrease the huge supply that’s been created because of dumping by PW allottes and bonus shares.

-Giving shares to employees/management team (ESOP) will show that the company feels it has a good future and that the employees/management are committed to the company’s future and its growth. Why aren’t you considering this?

-Other companies have acquired or have plans to acquire companies without any issue but in BCG’s case, you always say that the acquisition is almost complete but change all the plans at the eleventh hour. Why does this trend repeat at BCG often? You said you wanted to acquire Mediamint but changed the plan later, same with audio ad company, which was later changed to a JV (with Consumables Inc). Were you ever serious about both the acquisitions? We understand that acquiring companies is not that simple and sometimes the valuations won’t work out but why don’t you keep the information private and announce to the public, shareholders and the market only when you are sure that the acquisition will be complete? We had a lot of hopes on Mediamint and the audio ad acquisition deals as they would’ve brought a fresh change but now we are disappointed with the outcome of both the deals.

-Did forensic audit play a role in not acquiring Mediamint or audio assets of Consumables Inc? Or did Mediamint or Consumables Inc cancel the plans to get acquired by BCG? Who initiated the change in plans, was it BCG or the other parties?

-Why is there a lack of information on BCG’s subsidiaries like Frontier Data Management Inc (FDM), International Expressions Inc (IE), Dyomo, DreamAd Group, Max Interactive? Can you give more details about these companies like their employee count, products and tools used by them etc? We can hardly see their presence on the internet, like they don’t have websites or not present on platforms like LinkedIn etc. Are the employees of these companies under the parent company i.e. Brightcom Group or those subsidiaries have their own employees?

-How many direct and contract employees are there in BCG and its subsidiaries?

-You acquired AdDynamix, and later renamed it to Pennyweb Inc but after that there’s no information about that company. Can you please explain about this and also the structure of BCG’s subsidiaries?

-Can you provide details on what business Dyomo does?

-You raised money from FPIs to acquire companies like Mediamint etc but those plans have changed now. Are the FPIs okay with the company not acquiring any company? What was the use of raising the funds?

-What are the threats to the company from things like AI, ChatGPT, decentralized Internet etc? Have you made investments in these fields?

-You keep saying that you’ll improve communication with investors but we’ve hardly seen any improvement. The phone lines that you started for investors a few months back were good initially but now we’re not getting any response from the IR team.

-Why is it taking so much time to close the Lycos deal with DAUM? Many other companies have acquired or sold companies or made more deals in this time without any issue but this one issue is taking so many years to close. Is the management serious about this or will this have the same fate as your other acquisition plans, that is, canceled or changed at the last minute?

-You mentioned in the past about the bandwidth of the management getting stretched. We understand that your job is highly stressful and that you are putting your best efforts in running the company. Why don’t you hire experts who can help you in this? This will benefit the company and you personally.

-Why doesn’t BCG follow the model that other tech companies follow, like having a CTO, COO, etc? Hiring people suitable for those positions will take load off the management and bring more clarity on the operations of the company.

-Why doesn’t BCG sponsor events like Digiday Publishing Summit, Adexchanger Programmatic IO, MWC, DMEXCO etc? Even smaller companies sponsor events like these which will help them add more clients. (BCG participates in these but doesn’t sponsor)

-You had reported that the company had appointed EY as the internal auditor but as SEBI pointed out, that wasn’t the case. Can you please explain this?

-When will you start the JV with Consumables Inc? Is it put on hold or cancelled as haven’t received any information on this from the company?

To Mr.Peshwa Acharya

-We were excited when you came on board and were made the president of group strategy. We request you to use your expertise in helping the company achieve its true potential.

-Because of forensic audit, SHP and other issues, there’s a lot of negativity about the company. How will you address this and make the company more transparent and investor friendly?

-You and the CFO, Mr.Narayan Raju, were appointed by the board to close the Lycos deal but that is still not completed yet. Why is it taking so much time and what are the challenges? Other companies close deals like this without any issue but we are seeing this only in BCG.

-In the last call you said that you had spoken with a few analysts and institutions. What developments took place after that? Did they raise concerns about the company? Why don’t we see their active participation in the company? What plans do you have to onboard more institutions and fund houses?

[Logan]

I’ll start preparing queries for the conference call and share them here at the earliest. We shouldn’t let what happened last time when we couldn’t prepare and send the queries before the call. That happened because they informed about the conference call late morning and held it in the noon.

I request everyone to do the same so that we can send maximum number of queries. Also, shareholders who get the opportunity in the conference call, please ask them tough questions and make sure that they answer all your queries.

Everyone is tired of the same old replies to our queries. Hope this time it’ll be different.

[Logan]

@vkhare789, except shareholders, almost everyone hates BCG. I don’t understand why they hate the company so much (since many years and also even before FA). As mentioned in my previous post, when talking about financials, some people deliberately leave out BCG’s consolidated financials and discuss only the standalone numbers. Even if they discuss consolidated, they highlight only the receivables. When comparing with other companies, they’ll do it only with typical IT services companies which are no way in the same business. They won’t even mention about companies like TTD, Magnite, PubMatic, Perion Network, Criteo etc.

The solution to this is the management/CEO should improve transparency and take initiatives to talk with analysts and institutions and give clear picture about the company’s business.

There was so much ambiguity about the subsidiaries of the company and to clear it all that was needed was sharing the subsidiaries financials but they did it only when SEBI ordered.

I’ve been requesting them to explain about items like other assets, other liabilities, other receivables, etc etc in the balance sheet but everytime they ignore that request. I’m tired and disappointed with their careless and ignorant attitude. It’s this type of private company mentality that is hurting the shareholders. Also, we should plead/beg to get any information which they were supposed to share in the first place (like correct SHP).

All shareholders should really thank sebi for their actions and because of that we got info on SHP and we can see subsidiaries’ financials etc.

[Logan]

@akkithegrt, I’ve noticed this bias from the day I started investing in BCG. For them, for every other company in the world we should consider consolidated financials but only for BCG we should consider standalone it seems. And they’ll say BCG is expensive looking at standalone financials.

For other companies, out of 10 parameters it may be bad for 9 but they’ll only highlight that one positive aspect and say that company is the best in the world. If Ebitda is bad they’ll say adjusted Ebitda is good and say we should consider that. But for BCG, out of 10 if 2 or 3 are bad, they’ll just highlight that and cleverly leave out the rest.

And don’t get me started on the comparisons with Affle (though not direct comparisons). I also like Affle but man the way they hype the company is so silly.

I read an article last week which said that BCG at 2PE should be carefully looked because business related things may change because of slowdown/recession etc in the future.

“However, they should consider factors such as intense competition, market saturation, technological disruptions, and economic downturns that may impact Brightcom Group’s future performance, he cautioned.

Any operational, financial, or reputational risks associated with the company should be carefully evaluated, he said.”

But for them, Affle is a blind buy at 100 or even 1000PE also. And there won’t be intense competition, technological disruptions, market saturation, and economic downturns for Affle but it’s only for BCG.

I’m not saying to buy or not to buy BCG or any other company but we should look at facts carefully and then take decisions. If you have any problem then it’s always good to approach SEBI instead of relying on people who are way too biased and who won’t give unbiased views.

[Logan]

I forgot to mention a very important point. Last year (2022) BCG paid 30 paisa (0.3 rupee) dividend and the total amount was little over Rs.60 crores. In 2020 it was 5 Paisa (or 0.05 rupee) and the total shares were 50 crores so the total amount paid was just Rs.2.5 crores. In 2021, it was also 5 paisa but maybe for double the number of shares so total maybe around Rs.5 crores.

Increasing total dividend paid by 24 times in 2 years
(2.5 crores to 60 crores) and 12 times in a year (5 crores to 60 crores) didn’t change the sentiment about the stock and the whole sentiment was based on 3 very important factors which I’ve mentioned in my previous post, which are FA, SHP and corporate governance issues. Fixing issues and being more honest, open and having transparency would’ve had better results than paying dividends (which I always say).

Also, BCG’s total dividend paid is more than what many companies make in profits in a year which still didn’t convince the market.

We have to analyse what the problems are and those problems will be different for different companies. Paying more dividends is a generic solution which doesn’t suit all the companies. It may set a narrative that dividend paying companies are stable but it hardly solves important problems.

And the company’s stock had a better performance when it paid off all the debt (and when it paid total dividend amount of Rs.5 crores) than when it paid 60 crores as total dividend amount. Though circumstances were different in both the cases, my point is that the market will cheer when there’s less uncertainty about companies and when they close pending issues.

Last year when the dividend was announced the stock was at 60 or 70 but look where it is now.

If there are 10 important things for the company to get a good valuation, dividend will only be one aspect and there’ll always be other important things and most of them will be about transparency, governance and growth and stability in the business.

[Logan]

@Nikhil Raj, stock price or the valuation are at these levels because of 4 things – one is FA, second is SHP issue, third is corporate governance (which includes many things like not communicating well with shareholders, not appointing a CS even after one year after the previous CS quit, not appointing CFO quickly, taking too much time to give bonus shares, taking years to close DAUM issue and not informing sooner that acquisition plans changed and took long to reveal the change of plans) and finally the fourth which is the most important thing which created so much supply is issuing shares to selfish traders who made hundreds of crores at the expense of retail investors.

Also, business related, SEBI’s investigation didn’t find anything wrong in the company’s operations or didn’t find any misuse or siphoning of funds but it concentrated more on how the impairment was reported. Recently SEBI did forensic audits on a few companies and it found those companies showed fake revenues – Securekloud and Seya Industries.

The company has used the funds well to grow the business. Me and all the shareholders would’ve been worried if SEBI found issues in the business. Also, they’ve uploaded audited results of major subsidiaries so now the market will start trusting the numbers than it did when everything was unclear.

I’m not saying that the company should stop paying dividends but what I’m saying is that let them not give more dividends and miss out on the opportunities that are there in the market (both organic and inorganic and it doesn’t have to be only inorganic). As far as I know, shareholders and the market will be happy if all the issues are fixed and if the company improves governance than if the company pays dividends or buys back shares.

I’m not supporting the CEO but I kind of get why he and the management changed their plans. Both Mediamint and audio ad plans were made when there was a bull market. Mediamint is a backend service company and you can manage backend by hiring engineers (huge supply is there on that front) and train them for months. You can get it done for way way less than what they agreed to pay Mediamint. Audio ad part, with Consumable Inc, I checked their profile but the available information is very less. What I’ve seen is that their growth rates are/were high in the last 2-3 years and I think before that they were very small (infact tiny).

(Consumable Ranked Number 32 Fastest-Growing Company in North America on Deloitte’s 2020 Technology Fast 500. Attributes 7,174% Revenue Growth to its Unique Ability to Blend Short-Form, Bite-Sized Entertainment into Digital Advertising
Consumable, the leading content discovery platform, today announced it ranked 32 on Deloitte’s Technology Fast 500™, a ranking of the 500 fastest-growing technology, media, telecommunications, life sciences and energy tech companies in North America now in its 26th year. Consumable grew 7,174% during this period.)

Looking at this high level of growth from a value investor’s perspective, I’m not sure whether it would be good to pay more than $100M for a company that grew it’s revenue 71 times in a very short time. In investing I won’t buy a company’s stock if its revenue increases many times in just a year or two. Most important thing here is that it depends on whether the growth is sustainable and whether the business is scalable. If the above can be done then I’ll be wrong in my assessment and I’d be a fool to miss out on that opportunity. Like I’ve mentioned above, there’s not much available information about the company to do any type of analysis. Their website is very informative in what they do and being a private company it’s obvious that there’ll not be much information about them. I can’t judge whether JV is better or outright acquisition would’ve been better but I’ll leave it to experts who work on ground and who know the technological trends.

And I’m guessing, if they acquired both Mediamint and audio assets of Consumable Inc then there wouldn’t have been any funds left and would’ve put the company in a difficult position. They’d have to spend close to $150M cash on both these. All the funds would’ve to be spent on these and once you acquire these you need also have to worry not only about your present working capital but also on these companies’ working capital. To manage that you’d again have to take on debt or issue more shares.

I’m the biggest supporter of buybacks (but not dividends) but when you have opportunities like audio ad (podcasts and streaming), presidential elections, and threats like ChatGPT, credit crunch, recession etc it’ll be better to concentrate on business and instead of dividend let them buy back shares. Once we are past that and when the company is in a better position it can pay more dividends. Also, dividends (and buybacks) are temporary solutions. I think a better solution to save cash would be ESOP, instead of paying cash to employees they can buy stocks from the market and give them that instead. If the stock is this volatile I’m not sure whether employees would agree to that. Most of the companies in the US give shares, though they don’t buy from the market but instead issue more shares.

Look at how the market treats and trusts Affle which doesn’t pay any dividend.

[Logan]

I’d be more happy if BCG doesn’t pay any dividend and instead use all the cash available to grow the business and become stronger. In the world of AI, ChatGPT, CTV, Quantum Computing (which will become big just in few years) etc, it’ll be prudent if tech companies like BCG look at stability and growth more than paying dividends (obviously I’m not forcing my views on others).

Some people say that the company should pay most of its profits as dividends and only then the management is serious etc, but this point doesn’t make sense for tech companies. If people invest in tech companies thinking they’d be paid more dividends like how typical IT companies pay (which are mostly IT service companies) then they are wrong as most tech companies and all ad-tech companies don’t pay dividends.

This year there’ll be a recession in the US and next year there’s the US presidential elections. One will be about how you tackle problems when there’s slowdown, and the other will be about growth. It’s good that BCG is a debt free company with no baggage (debt wise not governance wise). Companies which have borrowed more will find it tough in the coming months/years. There’ll be a credit crunch because of which it’ll be hard to raise money either through debt or equity. You will survive and you can take advantage if you have enough liquidity.

Let me share some interesting points. I’m guessing BCG has $100-150M cash (as per Q2 results) whereas Google has $100-150B cash (1000 times more i.e. if BCG has 1 rupee then Google has 1000 rupees). Amazon has more than $80B, Facebook has $40-50B, Microsoft has more than $100B, and Apple has more than $50B. All these are big in ad-tech and growing. Recently Amazon, Microsoft and Apple are concentrating more on advertising. Apple actually implemented strict privacy rules but it started its own DSP (demand side platform). And TTD has $1.5B in cash (10 times more than BCG).

When you are competing with giants who are flush with cash, you need to be innovative and have sharp focus, else you’ll find it difficult to survive.

Next year’s USA election will be very interesting. They’ll spend more ads and regional news publishers (B-local) will get more traffic and there’ll be more podcasts which would benefit Consumable Inc.

If the CEO/management maintained good image and if the corporate governance was good then the market would’ve considered the positives of BCG but the CEO, who is solely responsible for the pathetic state of governance, doesn’t care about valuation and how shareholders and the market think. Had he and the other promoters disclosed their actual holdings and if they explained the shp issue before itself, the stock wouldn’t have crashed like this. And because of his decision to give shares to selfish traders who became rich at the expense of retail shareholders, the stock wouldn’t have traded at these levels. No shareholder would’ve objected if the CEO took crores of salary and paid off his debts and got his shares unpledged.

He always gets annoyed and irritated if any shareholder talked about SHP issue but it was his duty to disclose that information which he failed to do so which created so much confusion and it took SEBI’s order for him to disclose that. I’m not sure we’d have got any info if SEBI didn’t force them to disclose. We should thank SEBI for that.

According to me, if they improve governance, comply with all the rules and regulations and communicate well (tell truth instead of giving same old reasons) then the market will give a good valuation to the company.

Once any company starts paying dividends and if they stop later then obviously it’ll look bad so I’m okay with them paying whatever they think is right but I don’t want them to pay more just for the sake of it. If they don’t find any opportunity then they can pay more but like I’ve mentioned above, there are many opportunities and it’ll be better if they use the cash for growth purposes. Let them start looking at potential acquisitions or JVs.

[Logan]

Thank God, they’ve finally uploaded the audited results of 4 subsidiaries (OMS, FDM, IE & Dyomo) and have not masked the financials.

Steps like these which improve governance and compliance are always welcome (which should’ve been done ages ago).

[Logan]

Some people are expecting a lot in today’s board meeting but looking at the past trends, we shouldn’t expect much from it. They’ll just appoint one of the three independent board members of BCG on board of BCG’s subsidiaries. I’d be surprised if any other item will be discussed. And of course they’ll share the outcome after midnight.

They should have some seriousness and should start caring about shareholders (caring and understanding shareholders’ pain instead of giving unwanted bonus shares)

[Author]

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