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Market Meditations: DVNTF
By Jay Lasus - 3/17/98
Over the past six months, Diversinet Corp. (DVNTF) has announced the addition of three new board members that include the Vice President of Microsoft for the Central US and Canada, the General Manager of Microsoft Network (MSN), and the Chief Scientist of Netscape. A Board of Directors of this caliber bodes well for any company.
Diversinet is a small company that has had a lot of difficulties in the past. Right now, they are looking to repair the ship. Last year, they sold the printing division of their company so they could focus on producing cutting edge e-commerce technology. In May, they plan to release their new line of products.
Their new product line has two key components. The first is a certification server, which will enable a user engaged in electronic commerce to be identified only by an ID number. In the past, it was necessary for a user to divulge his name, address, etc., which was then archived. That process saps a lot of memory and increases processing time. Also, the security of the information was in doubt. The second component of their product line is an authorization server, which allows network administrators to determine the level of access for a particular user. In recent days, Diversinet has further improved their security technology by licensing encryption technology from Certicom.
Diversinet is making a type of technology that is essential for electronic commerce. E-commerce was a $2.6 billion market in 1996, and is expected to expand to over $200 billion by the year 2001. Diversinet's technologies attempt to provide the security necessary for people to be safe in engaging in electronic commerce. The Florida Department of State recently tested the company's products. Nagy Moustafa, President of Diversinet Corp. said, ''We are delighted to contribute to the Florida government's progressive efforts to promote the safe use of public electronic networks, such as the Internet. This pilot project is a significant door-opener for Diversinet's other authentication/authorization products that can be used for many different kinds of security and digital signature applications in state government, ranging from electronic document notarization and filing to on-line electronic voting.''
Last year, the stock fell from the high single digits to a low of $0 9/16 just a couple of months ago. Can Diversinet overcome its past troubles? Signs of a rebound exist with the stock price now at around $3.00. With interesting products and new management talent, Diversinet may be poised to do well in the future.
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