Is Something Wrong With This Stock?

I've been downright critical of BroadVision (NAS: BVSN) over the past six weeks. The company's stock has been vacillating wildly for the better part of three months on relatively little news outside of a semiweekly news story which paints the company as either the best thing since sliced bread, or the Sodom and Gomorrah of the investing world.

I don't think I've seen a piece that's covered the middle ground as of yet, but one thing is for certain from my personal experience: Something doesn't smell right.

On one side of the coin is notorious penny stock promoter Jonathan Lebed, who is calling BroadVision his top pick of 2012. My best guess is BroadVision's lack of analyst coverage and its meager 4.5-million-share float attracted Lebed in the first place.

Also in the bull camp is the National Inflation Association, which informed the markets in January that it held (at the time) a 145,000-share position in BroadVision and felt it was the cloud play of the future. The organization also stated that it could, at any time, sell its remaining shares at will. Convenient, wouldn't you say?

Then, on Tuesday, a nonprofit organization called the Association of International Deflation Society came out with a press release touting BroadVision as the worst pick in the marketplace.

Does it not seem fishy to anyone that Lebed and the NIA have been beating the door down on BroadVision weekly, sometimes daily, and then an organization with the acronym AIDS comes out of nowhere to claim the opposite? Something seems amiss to me.

Allow me to dissect the arguments from each side just a bit deeper.

The optimists are correct in their claims that BroadVision is garnering customers. However, this hasn't done anything to allay an 11-year streak of declining sales. In 2000, BroadVision's annual sales totaled $416 million; they are just a shade under $18 million over the past 12 months.

Lebed has been steadfast in his claims that BroadVision could grow faster than Jive Software (NAS: JIVE) , but the proof is in the pudding. Even though I'm not a fan of Jive, I can still recognize the fact that Jive's revenue grew 67% year-over-year, and it gained notable clientele including Thomson Reuters and SAP while expanding its relationship with Accenture and Hewlett-Packard. BroadVision's sales are falling and its largest clients include Aeroxchange and Synaptics, which are relative no-names when compared to the companies under Jive's belt.

From AIDS, we get a website designed with Intuit's template software, which likely means it was put together in cookie-cutter fashion. The website attempts to take a look at why ClearVale is a failure and uses social-media sites Twitter and Facebook to prove its argument. While the website more or less emphasizes similar points I made a month ago about BroadVision, I can't help but feel the only purpose of this website is to counter the mind-drubbing newsletters thrown onto the market weekly by the NIA.

Whether inflation has anything to do with BroadVision is anyone's guess. What I can tell you is this: BroadVision is losing money, its sales are declining, and it's burning through its remaining cash. It doesn't matter what company we're looking at; that's a recipe for failure 100% of the time. Unless BroadVision's management is issuing the news from here on out, I'd just as soon take what the NIA and AIDS have to say and throw it out the window.

What's your take on the BroadVision fiasco? Is this a legitimate run-up or do you agree with me that something just doesn't smell quite right? Tell me and your fellow Fools about it in the comments section below.

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At the time thisarticle was published Fool contributorSean Williamshas no material interest in any companies mentioned in this article. He has little tolerance for people who hype stocks for their own benefit. You can follow him on CAPS under the screen nameTMFUltraLong, track every pick he makes under the screen nameTrackUltraLong, and check him out on Twitter, where he goes by the handle@TMFUltraLong.Motley Fool newsletter serviceshave recommended buying shares of Accenture. Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has adisclosure policythat only deals with the truth.

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