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MAJOR DEAL TO COME SAYS CEO
Investors are driving shares of SureFire Commerce substantially higher this week, although there is no news to account for it. CEO Rory Olson believes a combination of factors are shoving the company under the market's spotlight. A recent acquisition, upcoming quarterly results and management's "aggressive" attitude in publishing the company's new direction are all helping MTP reach new highs. In the next six months, SureFire hopes to complete a major partnering deal.
Toronto, ONT, January 21 /SHfn/ -- Shares of SureFire Commerce [T.MTP] (formerly Micro Tempus) have jumped dramatically higher this week, on heavier than usual volume. In trading on January 20, MTP closed up $1.50 to $8.35 as more than 1.6 million shares traded hands. After charting gains well over $3 this week, it is laughably distant from its 52-week low of $0.25. A move from the Montreal Exchange to Toronto's senior exchange in December, definitely helped entice new investors to the company. Most importantly though, it is a complete change of direction that positions the computer connectivity software maker directly in the e-business space that has ignited the market's interest.
However, there has been no recent news to explain the stock's current run, and no apparent grist in the rumor mill to account for it either. The unlikely timing of this rally might reflect the market's expectations of a news release soon, and be justified by the fact that this stock has a history of charting significant gains with no word from the company to propel it. In an interview with StockHouse, CEO Rory Olson gave a number of explanations for the trend.
"We've been working very hard and I guess word kind of gets out," he says. "This is a big-time value story."
First, he says, the company's recent acquisition of Stumpworld Systems gives SureFire a complete merchant-enabling solution to which the marketplace is really responding. Second, the company's third quarter results are due out February 1, causing a slight pre-report stir. Third and last, Olson believes SureFire has been aggressively spreading its story to analysts and customers. "We've been working very hard and I guess word kind of gets out," he says. "This is a big-time value story."
SureFire Commerce publicized its new corporate vision in late September with the announcements that it would purchase two e-commerce units and form a strategic alliance with BCE Emergis [T.IFM]. The first unit was IMF's Sports and Entertainment Division, an online transaction processing business that services sports and entertainment companies and is expected to generate more than $12 million in annualized revenue.
The second was an online financial services solutions company, which has a strategic alliance with Emergis. That company was owned by Rory Olson and Joel Leonoff--both had previously worked for the BCE Sports and Entertainment division. Now, they are SureFire's new CEO and COO, respectively, and hope to leverage the company's document management experience in the business-to-business space to offer leading online transaction processing and e-commerce.
The new products and services will include online transaction processing for Canadian online financial institutions, and helping small to medium-sized businesses become fully e-commerce capable. The broadening scope of its new positioning has led to a number of interesting developments.
On December 8, the company announced its intention to acquire Stumpworld Systems, an Internet e-tailer with an online shopping portal called BuyItOnline.com, as well as store creation software. Olson says the Stumpworld offerings give SureFire a "world-class merchant-enabling solution along with a Web portal environment" that allows the company to provide an end-to-end private label package to large institutional customers such as telephone companies and financial institutions.
"Not only that we can get a merchant online in an out-of-the-box solution within 24 hours, but we can then provide them with an environment in which to reside," he explains. Complete back-office reporting will help the small storeowner provide optimized service to customers.
SureFire doesn't expect to see revenues from the acquisition until the last calendar quarter of 2000, or the first calendar quarter of 2001. "I think that we will be building that infrastructure and building out presence and partnerships for much of the next two or three quarters," explains Olson. In the meantime, SureFire's core business will continue to grow at an internal organic growth rate of about 45% to 50%.
This acquisition was SureFire's main near-term objective as described by Olson in a previous interview with StockHouse. There is the possibility of further acquisitions, Olson says, but only if it enhances the company's current product suite or offers fast entry into a new vertical market.
In mid-December, SureFire announced a strategic alliance with SKG Interactive and NorstarMall.ca to offer its transaction processing technology, as well as its web and e-commerce enabling product to its new and existing merchants. "NorstarMall is very significant because it validates us here [in Canada]," says Olson. He reveals that there are other similar deals now in the works. "There are deals coming in the context of three to five months and all I could do is point to our track record from the last four months. We hope to continue to follow through."
"We hope to have concluded a very major partnering deal with respect to our BuyItOnline.com portal and we hope to have expanded the footprint in the US."
In the next six months, there are a number of milestones Olson hopes to achieve for SureFire, aside from growing its core business at the projected rate. "We hope to have concluded a very major partnering deal with respect to our BuyItOnline.com portal and we hope to have expanded the footprint in the US," he recites.
The company is in a crucial period where it must quickly establish market credibility for its new direction. The rising stock price and the recent and upcoming deals seem to validate Olson's vision for SureFire. He believes the market is just starting to recognize the value of the company and says that, "this is a big-time value story." While there are no analysts currently following MTP, there are some who "are starting to come around and kick the tires a bit." Olson opines that the SureFire story is drawing more attention, driving up trading volume and the share price. "We are out there quite aggressively on the Street, talking to analysts, and talking to customers all over Canada, the US and Europe," he says. "We've been working very hard and I guess word kind of gets out. We've been very aggressive."
The company's third quarter results due out February 1 are also a factor in the upturn, according to Olson, and investors will like what they see. "We've done very well, we're very optimistic as far as those numbers are concerned," he says. "The market will respond quite well to those."
As SureFire develops its broadened business model and matures, investors might become increasingly comfortable with Olson's vision. "I think what you're seeing here is the case of a small Canadian company starting to act like a US-based e-commerce or Internet-space company and it's a bit disconcerting," he muses. "In the US I think we would be de rigeur and not out of step with anybody."
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