Bessemer Venture Partners, which is the oldest VC firm in the US, has picked many winners such as Skype, VeriSign (NASDAQ: VRSN) and LinkedIn. So, what does the firm like right now? Well, one sector is on-demand business applications.
In fact, this week the firm led a $15 million investment in Intacct, which operates a web-based ERP system. In all, the firm has raised $29 million in the past nine months.
"We focus on small and mid size companies," said Marc Linden, Intacct's CFO, in an interview with me. "It's for those businesses that are graduating from Intuit's (NASDAQ: INTU) QuickBooks. And we estimate the market size at $7 billion."
No doubt, there are some tough competitors, such as NetSuite (NYSE: N). But with such a large market size, there should be room for a variety of players.
And what about the slowing economy? According to Linden, there is "no effect yet." Then again, by using an on-demand model, customers may be looking to Intacct to cut costs.
Tom Taulli is the author of various books, including The Complete M&A Handbook (www.mergerbook.com).
VeriSign (NASDAQ: VRSN) had excellent performance in 2007. The stock ran from the low $20s to the low $40s, and now has settled in at $37.54. My 2008 price target for VeriSign is $55. It will be an interesting year for this company -- the toll booth of the internet.
I wrote about VeriSign back in late May 2007 when the tenured CEO, Stratton Sclavos, abruptly left the company. Sclavos was CEO for 11 years, having taken the company through its 1998 IPO and many, many acquisitions. Since his quick departure last May, the stock has gone up from $25 to its current price. The market has voted favorably on this CEO's departure. So what makes VeriSign a great buy for 2008?
Regular readers of BloggingStocks will find no shortage of stock picks for 2008 on our pages. Steven Halpern alone has compiled about 120 picks from the investment advisors he follows. But plenty of other bloggers have favorites for 2008 to share.
In an effort to consolidate the wealth of ideas into one handy post, here are a few of our bloggers' favorite selections for the year ahead:
Priceline (NASDAQ: PCLN) is the current favorite of Beth Gaston Moon. It's already had an amazing run in 2007, climbing from about $45 to $120 a share. Looking for a lower-priced stock? Beth recently spotlighted 10 Stocks for Under $10.
Deckers Outdoor (NASDAQ: DECK) is a stock I picked in a recent video, which Beth likes as well. I think it will continue to surprise to the upside on the strength of sales of its trendy Ugg boots. Zac Bissonnette thinks it will no doubt flame out at some point.
MOST NOTEWORTHY: Sprint Nextel, Tesoro, VeriSign, Healthcare Property and Resources Connection were today's noteworthy downgrades:
Goldman downgraded shares of Sprint Nextel Corporation (NYSE: S) to Neutral from Buy to reflect continuing turnaround delays, macro headwinds and competition.
Tesoro Corporation (NYSE: TSO) was downgraded to Neutral from Outperform at Credit Suisse, citing increased concerns regarding West Coast margins.
The firm also lowered VeriSign Inc (NASDAQ: VRSN) to Neutral from Outperform, as they believe the company's reorganization could require more time than investors anticipate.
Friedman Billings downgraded Healthcare Property (NYSE: HCP) to Market Perform from Outperform on valuation. Shares were also downgraded to Neutral from Buy at UBS.
Resources Connection (NASDAQ: RECN) was downgraded to Hold from Buy at Stifel, to Market Perform from Outperform at JMP Securities and to Peer Perform from Outperform at Bear following its Q1 report.
OTHER DOWNGRADES:
Walgreen (NYSE: WAG) was downgraded to Neutral from Overweight at JMP Securities.
JP Morgan downgraded Staples Inc (NASDAQ: SPLS) to Underweight from Neutral.
VeriSign (NASDAQ: VRSN) option implied volatility flat at 36. VRSN provides intelligent infrastructure services for the internet and telecommunications networks. VRSN will report its EPS on 11/1/07 and has an analyst day on 11/14. VRSN closed at $29.80. VRSN over all option implied volatility of 36 is near its 26-week average according to Track Data, suggesting non-directional risks.
IBM (NYSE: IBM) implied volatility of 29 above 26-week average of 20. IBM closed at $109.22. IBM over all option implied volatility of 29 is above its 26-week avearge of 20 according to Track Data, suggesting larger price risks.
Microsoft (NASDAQ: MSFT) implied volatility of 28 above 26-week average of 22. MSFT closed at $28.27. MSFT over all option implied volatility of 29 is above its 26-week average of 22 according to Track Data, suggesting larger risk.
MOST NOTEWORTHY: Micron Technology (MU), Halliburton Co (HAL), Visual Sciences (VSCN) and Shaw Group (SGR) fill today's noteworthy upgrade list:
ThinkEquity upgraded shares of Micron Technology (NYSE: MU) to Buy from Accumulate, citing strength in the PC market. The firm believes Micron is well positioned to benefit from the potential secular uptrend in the DRAM market over the next 12 months.
Credit Suisse upgraded shares of Halliburton (NYSE: HAL) to Outperform from Neutral citing solid cyclical fundamentals, which should offset overly negative perceptions.
JMP Securities upgraded Visual Sciences (NASDAQ: VSCN) to Market Perform from Underperform based on the potential acquisition.
Citigroup upgraded shares of Shaw Group (NYSE: SGR) to Buy from Hold to reflect the company's robust backlog growth and changes in management...
GE's CNBC cable business news channel and the Financial Times Group are in discussions to share resources and shore up their Web business, reported the Wall Street Journal.
VeriSign Inc (NASDAQ: VRSN), which oversees dot-com and dot-net domain names registry, has recorded an additional $160M in compensation expenses related to stock option grants made between 1998 and 2006, causing the CFO to resign, reported the Wall Street Journal.
The Financial Times (subscription required) reported that Virgin Media Inc (NASDAQ: VMED) has hired financial services company UBS AG (NYSE: UBS) yesterday to pursue strategic buyers.
Allegheny Tech's (NYSE: ATI) volatility increases on vague buyout chatter. ATI is a diversified specialty metals producer with revenues of $4.9 billion in 2006. ATI is recently up .25 to $107.80. ThyssenKrupp has been frequently mentioned as interested in specialty metal producers. ATI has market cap of $10.9 billion. ATI call option volume of 14,650 contracts compares to put volume of 3,172 contracts. ATI July & August option implied volatility of 40 is above its 26-week average of 37 according to Track Data, suggesting larger price risks.
Tesoro-(NYSE-TSO) volatility & volume higher on renewed takeover Speculation. TSO, an independent refiner and marketer of petroleum products, is recently up .88 cents to $60.27 on renewed takeover speculation. WTI Crude oil futures are down .35% to $71.94 according to Bloomberg. TSO call option volume of 6,779 contracts compares to put volume of 637 contracts. TSO July & August option implied volatility of 42 is above its 26-week average of 35 according to Track Data, suggesting larger price risks.
Posted Jun 18th 2007 5:15PM by Tom Taulli Filed under: Deals
Several months ago, I had a chance to talk to Neal Creighton. He's the co-founder of GeoTrust, which provides secure transaction systems for e-commerce. He sold his company for about $125 million to VeriSign Inc. (NASDAQ: VRSN) in September of last year.
Creighton didn't waste much time. His next venture is RatePoint, which appears to be getting some traction. Today, the company announced a $6.5 million Series A funding. The investors include Prism VentureWorks and .406 Ventures.
Basically, RatePoint is kind of like the Better Business Bureau for e-commerce merchants. That is, it handles customer feedback. It can not only help with customer service issues, but provide a better sense of the needs of customers (which is not always easy to determine in the online world).
It's an interesting idea -- although, it will likely take some time and more money to become a standard. Then again, RatePoint's team did a great job in getting lots of distribution with GeoTrust.
The business model? RatePoint charges an annual $49 fee.
The controversial company VeriSign Inc. (NASDAQ: VRSN) has gone up nearly $4 since the sudden resignation of embattled CEO Stratton Sclavos this past Tuesday. I wrote earlier this week that Stratton Sclavos was indeed a polarizing figure, but had survived the Silicon Valley merry-go-round by having lasted 12 years at the helm. Some major institutional investors did not want to be involved with VeriSign's stock as long as Stratton Sclavos was the CEO.This past week has changed that thinking as the stock has lifted from $26 to $30.
As I wrote in my book Stop Losing Money Today, the most important factor in making a decision in owning a stock is the senior management. If an investor cannot get comfortable with a company's CEO, chances are they will avoid the stock. The CEO sets the tone and the vision of the company, plain and simple. The CEO selects the people to run and operate the divisions within a company. The CFO -- chief financial officer -- is entrusted with delivering the vision by the numbers and too communicate effectively with Wall Street as to the composition and direction of those numbers.
Stratton Sclavos was indeed a visionary with VeriSign. When he took over the reigns in 1995, the yet to be public company was doing about $10 million in revenues and was viewed basically as a security company. Under Stratton's watch, VeriSign has grown to a $1.6 billion revenue base company with healthy margins and a strong bottom line. So what happened?
Stratton Sclavos was an acquiring CEO. He believed that whenever something could not be developed internally in a timely fashion -- go out and buy it. Buy it he did. Stratton kept investment bankers busy and always searching for the next property to put into VeriSign's portfolio. Several missteps happened along the way, as well as some good, solid acquisitions. Stratton annoyed some investors as they were concerned about VeriSign deviating away from its core competencies.
Stratton Sclavos, Chairman and CEO of VeriSign Inc. (NASDAQ: VRSN) today said he was leaving after 12 years, which for a Silicon Valley-based technology company is the equivalent of a lifetime. VeriSign is trading up a bit following the news. I have known Stratton these past 12 years, having traveled with him on several occasions to visit institutional investors. He is a fine gentleman, and a friend who was as dedicated to his company as any CEO I have ever known and I have known more than 300 CEOs.
VeriSign is the utility of the internet. All .com and .net addresses are registered through VeriSign and all communications ending in .com and .net must pass through the VeriSign data center. VeriSign is also the leader in web site digital certificates. These certificates allow the customer's servers to be secured so that all transaction and sensitive information are encrypted. Key ecommerce vendors from Amazon.com Inc. (NASDAQ: AMZN) to large banks use Verisign's web site digital certificates, which have never been hacked.
The beauty of VeriSign's financial model is that it has high margin products that renewed on an annual basis. The company is emerging as a cash flow juggernaut. It's also the leader in cell-phone communications as the "hand-off" expert from one network to another.
Sclavos is a skilled operator and ably led the company through both the boom and the bust times. He was there for VeriSign's initial public offering in 1996 and kept the investment bankers busy these past 12 years with acquisitions including the Network Solutions purchase in 1999 that secured VeriSign's position as the true utility of the internet.
VeriSign stock is interesting at $27.50. I estimate it will earn $1.10 this year growing to $1.35-1.40 next year. With operating margins headed up to the 22-25% range, VeriSign may look quite tempting for a private equity transaction. With the current market capitalization at $6.5 billion and revenues approaching $1.75 billion, the guns of private equity may be pointing VeriSign's way.
I have been writing about the investment merits of VeriSign Inc. (NASDAQ: VRSN) for over one year. The major premise of recommending VeriSign is its pricing ability and power. Well, that power is materializing as VRSN has announced a 7% price increase for all .com domain addresses and a 10% price increase for all .net domain addresses.
VRSN is the keeper of all .com and .net addresses. All traffic ending in .com or .net must go through the VeriSign data center. They are, in essence, the toll booth of the internet. VRSN will see potential viruses before any other company and they can also detect any terrorist plots to hack the internet. It is literally one American company with a special 'red phone" directly to the White House. I once asked CEO Stratton Sclavos if he's ever had to pick up the phone, and he refused to answer that question. He said if he told me, he'd have to kill me... I think he was kidding.
VeriSign was granted the status of keeper of the internet by the US Department of Commerce and by not for profit Internet Corporation for Assigned Names and Numbers, otherwise known as ICANN. ICANN has granted Verisign the exclusivity to .com and .com through 2012 with the presumptive right of renewal. VeriSign was awarded the lengthy agreement back in the 1990's and it was renewed this past year by ICANN trough 2012. With the approval came the little detail that VRSN wanted: being able to raise the annual price.
VeriSign Corp. (NASDAQ: VRSN) has been named one of America's most admired companies by Fortune magazine for 2007. It would stand to make sense as the CEO, Stratton Sclavos has been in the role for the past 11 years. Any tenure beyond five years for a Silicon Valley technology company is actually quite admirable. Stratton has both a corporate conscience as he attempts to maximize VeriSign's revenues and earnings, and a strong social conscience as well. Having gotten to know him pretty well these past ten years, his goals are to make VeriSign a major, significant company, and to ensure that the internet is available to all, whether they can pay or not.
VeriSign is the toll booth, the registry, for all .com and .net domain names regardless of where they are purchased. The company has planned for extensive expansion beyond just the traditional .com and .net usage. Currently there are 65 million .com and .net domain names and the growth rate is nearly 30%.
VRSN also ensures encrypted communications for ecommerce transactions and information through the issuance of web site digital certificates. It's a recurring revenue model as is .com and .net. VeriSign earns $6 per name, per year. The Department of Commerce has granted VRSN the exclusive registry privileges through 2012, with presumptive renewal rights thereafter. The website digital certificates run about $699 per server, per year.
Jim Cramer has stated that Google, Inc. (NASDAQ:GOOG) is probably in a slight pause here at $464 and that it would become a lot more interesting around $440. I agree; not all stocks just zoom straight up. The digestion period for a stock as successful as Google is a healthy thing.
Cramer then recommended three names to replace those Google dollars: eBay Inc. (NASDAQ:EBAY), Yahoo! Inc. (NASDAQ:YHOO) and IAC/InterActiveCorp. (NASDAQ:IACI). All three a good technical as well as fundamental calls. Yahoo! will be most fascinating to watch as it has lowered expectations enough it would probably exceed them in the next few quarters. Memories are short-lived, the headline will read "Yahoo! exceeds estimates."
Cramer forgot to add the fourth name to the group. That company is VeriSign, Inc. (NASDAQ:VRSN).
VeriSign Inc. (NASDAQ:VRSN) reported decent fourth quarter results at the end of last month, basically in-line with the Street expectations. Peel back the onion and one can draw the conclusion that this company should have a great 2007/2008. VeriSign is the gatekeeper of all .com and .net addresses. Even if the address is bought from GoDaddy or any other vendor, the buyer must remit $6 per address per year to VeriSign. It is the cash register.
Through December 31, 2006, VRSN announced there were 65 million.com/.net addresses, up 30% from 2005. The Department of Commerce has agreed to allow VeriSign to be the keeper through 2012, and then VRSN has the preemptive rights to renew the contract. It can also raise the $6 per year charge, which would flow hugely to the bottom line.
VRSN also sells the web digital certificates that allow for easy, secure e-commerce. For $699 per server, per year, VRSN will encrypt sensitive data between buyer and seller. It has over 800,000 digital certificates in place with its customers. In essence, VeriSign is the infrastructure leader of the internet; a true utility to the internet.
Bessemer Venture Partners, which is the oldest VC firm in the US, has picked many winners such as Skype, VeriSign (NASDAQ: VRSN) and LinkedIn. So, what does the firm like right now? Well, one sector is on-demand business applications.
Regular readers of BloggingStocks will find no shortage of stock picks for 2008 on our pages. Steven Halpern alone has compiled about .gif){kind=logo}
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Several months ago, I had a chance to talk to Neal Creighton. He's the co-founder of GeoTrust, which provides secure transaction systems for e-commerce. He sold his company for about $125 million to 
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