William is quite correct. Java tools are quite unstable at this time.
But, as rapidly as this field matures, they may be quite stable in 6
to 9 months. However, Visigenic also has a C++ ORB. Without a doubt,
marketing will be key to Visigenic's success. Iona is a marketing powerhouse. On a pure technological comparison, Iona's Orbix and
Visigenic's VisiBroker products are very close. Iona must be given
the edge on marketing, in that they make alliances with everyone.
Undoubtably, Visigenic must take a slightly different approach.
Therefore, the conditions for Visigenic's success must be, first, the
acceptance of CORBA over MicroSoft's ActiveX, or at least a large
enough of a following to generate significant revenues. I believe
this will happen. Second, the continued success of Java and the
Internet. This, too, seems likely to occur. Lastly, since nearly
all of their revenues currently are derived from ODBC drivers, a
successful marketing campaign for their two ORB products. Here is
where the competition from Iona comes in. I believe the chances
are good they will be enough room in the business for both of them.
Especially since CORBA 2.0 compliant products can interoperate via
IIOP. If a large organization should choose both companies products,
they can be made to talk to each other. The only other competition
I see is the TP monitor vendors. But I'm not concerned much about
them.
So, the final question is, is this stock an attractive buy at current
prices? Here is a quote from an investment friend after he visited
the SEC website:
"One thing I found was that while the IPO offered 2.1 million shares, there are actually 12.1 million shares, total. Plus 1.5 million warrants convertible at $1.75/share. So you need to consider there are 13.6 million shares, at $11/share that would give a market capitalization of about $150 million, with about $20 million of that in net cash. So I figure they are valuing the company alone at about $130 million. Total 1995 revenues were about $5.6 million, and in the quarter ending June 30, 1996 revenues were just under $3 million. So this is pretty richly valued: if they manage to have $15 million in 1996 revenues, you'd have a price/sales ratio of 10:1 (going back to the "including cash" market cap.). And the company is losing money at this point. So that's my take on the numbers."
And, he wrote that when Visigenic was at $11/share. Now it is $12.
Needless to say, I have not purchased it yet, but watching it very
closely. |
