OK, so BroadVision (NAS: BVSN) is no MF Global, so you're all probably getting pretty tired of hearing my take on cloud software play, but a major development occurred yesterday that I couldn't pass up -- we actually heard directly from the company.
Yesterday BroadVision released its annual 10-K, which I have been eagerly waiting to read, to say the least. In response to the company's volatile stock price, BroadVision has the following to say: "We are not aware of any corporate developments that we believe would explain this unusual activity."
Not really a surprise when my contention in the first place is that stock promoters NIA, Jonathan Lebed, and AIDS have been in charge of the stock for months, but it's finally good to hear from the horse's mouth that no corporate development merits such a rise in the stock price.
BroadVision, in regard to its stock price, also mentioned that there exists an outside possibility of litigation against the company if its stock price were to drop significantly from its current levels. It attempted to compare itself to other technology companies that have recently faced litigation due to large price drops that were disproportionate with reported results.
With regard to Clearvale, BroadVision spelled it out plain and simple:
Revenues in year 2011 of $17.6 million were down 19% from 2010 revenues of $21.8 million. The decrease was due to product transitioning. We are investing heavily in our new product, Clearvale, while our older products mature. It will take time for the new product revenue to ramp up. We anticipate that net cash used for operating activities will continue to be the material use of our existing cash and cash equivalents and short-term investments.
In short, BroadVision is betting the boat on Clearvale, but you can expect continued losses and its remaining $54 million in cash to dwindle as it attempts to survive its product transition. The company's accumulated deficit since inception is now up to a staggering $1.2 billion.
We also received a more defined breakdown as to where BroadVision is generating the majority of its sales. Domestically, BroadVision's sales dropped 36% in the America's, while it shed only 8% in Europe. Its Asia/Pacific revenue actually ticked up 3%, largely due to legacy products. Note that this may be the first time anyone has used the phrase "ticked up" with regards to BroadVision's results in more than five years.
But, perhaps the biggest news of the night came from CFO, Shin-Yuan Tzou, who filed to sell 180,713 shares at $40.73. CEO Pehong Chen still owns 1.6 million shares, or 36%, of the outstanding shares and has not filed to sell any thus far.
So there we are folks -- finally, some facts! We now know that BroadVision's revenue is likely to continue to decline in the near term, right along with its cash position, while rivals Jive Software (NAS: JIVE) and Lithium continue to grow rapidly and gain notable clientele. We also know, based directly on BroadVision's 10-K, that there aren't any material events that explain the stock's recent surge. If that isn't enough proof in the pudding that something could be wrong with this stock, then I don't know what is.
Care to share your two cents on BroadVision? Sound off in the comments section below.
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At the time thisarticle was published Fool contributor Sean Williams has no material interest in any companies mentioned in this article. He much prefers 10-Ks as opposed to random newsletters. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.Try any of our Foolish newsletter services free 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 a disclosure policy that only deals with the truth.
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