Diligent Boardbooks IPO

[MAC]

MAC, I don't know for sure but would be surprised if that $7.15 figure is still current based on the new information released by the company a few days ago.

Hi Frankenstein, good to see you giving FA a go.

The announcement was pretty much as anticipated I thought and seemed proportionally in line with the lower rate of growth expected, thus it should already be built into revenue streams by most analysts and brokers already.

I would anticipate that most brokers will probably update again after the 28th October results announcement, so we should probably get their consensus view in 2-3 weeks.

My view is that it is likely their valuations will stay the about the same, they could even raise a smudge if it is determined that the restatements do not result in the worst case 5-10% adjustment scenario that we know some of the brokers have conservatively built in.

My models give be FY13 $7.20 at this time, but will also revise on the 28th.

[blackcap]

Moosie, as the SP is presently $4.87 and consensus analysis and fundamental valuation is around $7.15 then there is a modest 47% medium term upside potential for DIL. You must be looking at an absolute dead cert to go elsewhere, please do share ?

Isnt consensus analysis pricing DIL at $4.87? Because call me naive but I thought the market was the consensus of informed buyers and sellers all conducting their own analysis?

[Frankenstein]

Hi Frankenstein, good to see you giving FA a go.

The announcement was pretty much as anticipated I thought and seemed proportionally in line with the lower rate of growth expected, thus it should already be built into revenue streams by most analysts and brokers already.

I would anticipate that most brokers will probably update again after the 28th October results announcement, so we should probably get their consensus view in 2-3 weeks.

My view is that it is likely their valuations will stay the about the same, they could even raise a smudge if it is determined that the restatements do not result in the worst case 5-10% adjustment scenario that we know some of the brokers have conservatively built in.

My models give be FY13 $7.20 at this time, but will also revise on the 28th.

Yeah thought I'd give some a go! Still got lots to learn but hopefully I'm getting there.

Hmm $7.20 is a long way from my attempt - would you mind sharing your key assumptions? Would love to see where the differences lie. I'm assuming your model is a DCF?

Also are you sitting on a profit with DIL right now? Those sitting on a profit with a margin to play with may have a different outlook to those (like me) trying to minimise loss.

Cheers
-F-

[Brain]

Isnt consensus analysis pricing DIL at $4.87? Because call me naive but I thought the market was the consensus of informed buyers and sellers all conducting their own analysis?
blackcap - I think that with regard to diligent shareholders you are being naive. I think the market is being determined by a bunch of manic depressives that seem to be incapable of controlling their medication.

[blakecb]

Isnt consensus analysis pricing DIL at $4.87? Because call me naive but I thought the market was the consensus of informed buyers and sellers all conducting their own analysis?

This has always been my view. The share price is the only valuation that matters to me. It is the valuation carried out by those who have the most on the line at the time - buyers and sellers.

The thing is, the market likes certainty. And our most recent announcement is full of uncertainty. Take certainty away (aka CNU, MRP, etc.,) and the market will price the stock with that in mind. It is not irrational to do that as some on this site suggest. All may be well and hey back up we go and what was the fuss about.... but it may not be well, it may be terrible and down the ship goes. So of course people will price in risk accordingly.

[Wolf]

I bought in at 5.3 mostly based on the fact that i believed that the share price drop was not justified by the accounting issues. Sadly now that the customer increase has declined it is more justified although i still think the drop on Friday is a bit more than it should have been, more controlled by panic i believe. I like to think that that decrease in new customers is due to the accounting issues being more of a focus but i am unwilling to wait and find out.

I too will be exiting on monday. I was hoping their may be a slight increase in sp but judging by all the posts on share trader it seem's alot of people will be exiting straight away so it doesn't seem that's going to happen.

Two lesson's i gained from this are:
Stop losses. I am now going to put stop losses on risky companys. I thought about putting one of DIL but was too confident that the share price was going to go up not down, went to work where no internet coverage is available and came back to a nasty suprise friday night at the airport :(. If i had service i would of sold the second i read the annoucment. Aaah well lesson learnt on stop losses.

Risk Management. I am not buying into another company with multiple accounting errors.

I only had $3000 in Diligent so i'm quite lucky. Thought about topping up but decided against it until good news was out! So glad i did.
My heart goes out to those of you who have large amounts of money in Diligent. Hopefully it recovers but i'm not willing to wait to find out.

[winner69]

Jeez what a week ......a few of us deserted the ship early last week .....the manic depressed irrational bailed on Friday ......and now wolf and moosie going to 'unwind' their positions on Monday.

I think sparks got out before he announced his retirement from here ....he couldn't face up to telling us that after hyping it up for so long that he was out. He a guru and smart cookie that sparks.

Belg won't be buying anyway cause he reckons DIL is a one hit wonder and they have about peaked.

Mouse sounds like he holding still even though he tells us the head honcho is embarrassed about his pay cheque ....maybe he believes what belgie said and knows it is a one ht wonder.

Hoop won't be buying moosie s or wolfs shares .....chart is really sick

Mac and a couple of others are still believers ....holding and maybe topping up big time, who knows

Missed a few .....never mind, I apologise.

Whatever happens in the next week or two some will lok back and I say I was right and others will say hells bells I stuffed up bg time.

Interesting times tomorrow ....pity there is not a futures market on DIL

[winner69]

What are the terms around Mr Sodi's options?

Take it really favourable?

[Wolf]

Agreed winner i wish i could short dil. I reckon it's going to be a real turbulent market.

[knl]

stumbled on to this while looking around, and thought it's reasonably interesting, sharing to those that want to find out more about what the company actually does etc:

http://www.youtube.com/user/link2portal?feature=watch

[goldfish]

I wonder what the guy who sold his house and car to invest in this is thinking about now, poor fellow.

[Wolf]

Yes poor roadrunner. I hope that if he holds it the market recovers

[Hoop]

Isnt consensus analysis pricing DIL at $4.87? Because call me naive but I thought the market was the consensus of informed buyers and sellers all conducting their own analysis?

Correct Blackcap... This is called Efficient Market Hypothesis (EMH).....note it's a hypothesis not a theory....over the years analysts have pulled it to bits.... it's not perfect by any means and the market fundamental purists hate it.... but for the average Joe Bloggs the Efficient Market Hypothesis price (market price) is often just as good as some of the many fundamental and forward pricing equations put forward by Financial Analysts and others....they all result in vastly differing price :mellow:......and adds hundreds if not thousands of ST posts with arguments and counter arguments as to which one is right....................shhh don't tell Moosie :D

One well known major argument against EMH is the questioning as to why low PE Ratio stocks on average outperform High PE Ratio Stocks...anyway criticising EMH is another story so lets not go there in this thread...Even though the EMH fad has worn off years ago you still hear the saying from me on ST that "Mr Market is always right until it proves itself wrong".

Also.............One of the 6 tenets of Dow Theory is The market discounts all news....even though the EMH was introduced well after the DOW Theory the thinking is similar.......Therefore at any given period of time the Stock price is the result of all information known....so as we saw with DIL as the example any news announced the price is corrected.....even though it seems as basic commonsense to all of us it is amazing how the human psychological behaviour manages to make something simple seem a x1000 more complicated.....

[winner69]

Market cap of us$340m or close to $470m if take until account the options.

Investors have put in $25m ......so Market Value Added is say $450m ....they have done well eh

Old fashioned financial analysis says that this $450m is the present value of all future returns over and above the cost of capital.

Cost of capital not much to keep it simple essentially future free cash flows.

Even with increasing customer numbers and widening margins currently cash flows seem to be declining .....at best over the 18 months a $20m annual cash flow.

On that basis arriving at a NPV of $450m for future cash flows beds some outrageous assumptions about growth ....growth forever in my view ......to meet this current valuation.

My valuations justifed buying at $2 and $3 .....from that point in time it became a matter of following he charts ....forgetting the fundamentals ....let market sentiment rule .....irrational on the way up and now irrational on the way down ....can't win eh.

Milford were the gurus ......they obviously worked out that 8 bucks was irrationally high and took their profits.....they probably only thought it worth 3 to 4 bucks as well but as long as the market was happy to pay more why not go along for the ride ....good on them

But then what the heck do I know .....prob a big bounce tomorrow to 550 and 'sanity' returns to the market ...nice

[blackcap]

Correct Blackcap... This is called Efficient Market Hypothesis (EMH).....note it's a hypothesis not a theory.....

Cheers for your reply Hoop. Im sorry you probably misunderstood my post as I was being a little bit facetious. I certainly know what the EMH is having studied finance... it was practically pushed down our throats along with the CAPM. While the caveats were not really taught. Martin Lally was the professor at the time and he would not accept any critique of the EMH. Or at least to an impressionable 21 year old it felt like that. Just like how the Beta's were calculated using historical volatility as the best indicator of future volatility.
However I do feel strongly with stocks like DIL, it is nice to have analysts putting valuations like $7.15 on the stock, but unless they are prepared to put their own money into them, these valuations are practically worthless. Like blakecb said... its when your money is on the line.....

[winner69]

Good story blackcap. Reminds me of when my daughter and her friend were discussing the Phillips curve as part of homework. I showed them some research that said it wasn't working any more. Next day daughters friend told the economics teacher that Mary's dad reckons the Phillips Curve is a load of bollocks .... I heard all about it at the next parent teacher interview and said his job hard enough without smart arse kids challenging him ..,,ha ha

Interesting the Phillips Curve seems to be behind how long QE lasts ....wel done Ben

[Hoop]

Cheers for your reply Hoop. Im sorry you probably misunderstood my post as I was being a little bit facetious. I certainly know what the EMH is having studied finance... it was practically pushed down our throats along with the CAPM. While the caveats were not really taught. Martin Lally was the professor at the time and he would not accept any critique of the EMH. Or at least to an impressionable 21 year old it felt like that. Just like how the Beta's were calculated using historical volatility as the best indicator of future volatility.
However I do feel strongly with stocks like DIL, it is nice to have analysts putting valuations like $7.15 on the stock, but unless they are prepared to put their own money into them, these valuations are practically worthless. Like blakecb said... its when your money is on the line.....

Apologies Blackcap....
yep misunderstood your post.. totally sucked in hook line and sinker..should've realised :blush::blush:.....

Bugger all this FA TA crap...I think I will go back to the little known Financial Investing Voodoo Strategy...I'll pull out a couple of pins from the Alessandro Sodi doll tonight and buy some DIL shares tomorrow.....

[winner69]

So...... Diligent’s cash balance increased by $US 8.4 million in the third quarter of 2013........The increase in cash was primarily due to a strong effort by the new financial team in bringing up-to-date the Company’s billing and collection efforts.

Good one ....but suggests real cash flows weren't that strong .....real being from operations

So lower than expected increase in new customers .....and not so strong cash flow

Something don't stack up here ....margins might be shrinking

I wouldn't be surprised if end of October comes and another delay .....would need to be suspended then

[Schrodinger]

I think my father needs to pick a stock and stick with it long term, he tries to do the trading thing but doesn't know when to buy or sell properly (much like moi sometimes!) I still believe DIL is a good long term hold, I just believe there is money to be made elsewhere right now before I consider DIL again. Homework, homework, homework!

If you believe it is a good long term bet why did you sell?

[winner69]

so now the debtors up to date does the $20m rolling 4 quarters fcf reflect normal state

More customers than a year ago .... retention rates still 95% ....fcf about the same as a year ago

A cash flow that is now valued at $450m or something like that

[Whipmoney]

so now the debtors up to date does the $20m rolling 4 quarters fcf reflect normal state

More customers than a year ago .... retention rates still 95% ....fcf about the same as a year ago

A cash flow that is now valued at $450m or something like that

Rention rate was re-confirmed at 97% as of lastest quarterly update. To be honest I'm not even sure what that means.. is this rentention over the life of the firm/boardbooks product? Or is it an annualised retention rate? The answers probably in their quarterly updates/financials somewhere but i'll need to keep digging.

I'm not really sure what you're getting at above but the Quarterly cash increase of $8.4m is a record for this company.

More customers, same rentention = more cash-flow.

[Slowlearna]

interest sake? lots of sellers stacking up

how do first trades work on nzx?
eg - dose lowest seller meet highest buyer?

[Whipmoney]

Retention rate would be over the quarter as they keep re-affirming it in their quarterlies.

That wouldn't make sense given they have annual contracts. Anyway I just found it in the Q2-2012 report:
" Diligent’s trailing 12 month client retention rate of 97% is among the best in class for “Software-as-a-service" model companies."

[Wolf]

Not liking the look of this depth. Looks like another big fall today

[stoploss]

interest sake? lots of sellers stacking up

how do first trades work on nzx?
eg - dose lowest seller meet highest buyer?

Basically yes and they meet where the most volume matches, roughly .......

[Mista_Trix]

Bloody hell.
To jump with the rest, or hold for the long term and just forget about it ...

[Whipmoney]

Not liking the look of this depth. Looks like another big fall today

Looks like a bunch of retail investors are running scared.

[Xerof]

Classic. Opening 439 offered

[Whipmoney]

Lol absolutely tanked.. Might be a good day to get the chequebook out.

[winner69]

Rention rate was re-confirmed at 97% as of lastest quarterly update. To be honest I'm not even sure what that means.. is this rentention over the life of the firm/boardbooks product? Or is it an annualised retention rate? The answers probably in their quarterly updates/financials somewhere but i'll need to keep digging.

I'm not really sure what you're getting at above but the Quarterly cash increase of $8.4m is a record for this company.

More customers, same rentention = more cash-flow.

Yes the $8.4m is a RECORD ....whoopee I hear all say

The debtors bit explains the pretty poor q1 and q2 figures of $3.1m and $2.5m respectively. Even you would say not good numbers eh, certainly not records

Q1 thru q3 cash lows this year $14.1m v $13.7m same period last year ......and they have heaps more new customers and maintained the retention rate ...not being converted into cash flow by the looks of it.

Re retention rate .....analysts seem to use this figure as an assumption of how much a periods revenue will flow through to the next period. Like last years sales were $42m so they assume that 97% of that will flow through to this year .....and in some models forever. To that number they add something for new business .....and so on

[Frankenstein]

Carnage! Am yet to sell as my sell orders kept getting undercut. Lots of fresh air underneath those three remaining bids...

Anyone picking a small bounce back this arvo or am I dreaming?

[bull....]

3.50 next stop

[psychic]

The boys at fidelity that bought all those shares will have to do a bit of fluffing eh?

[Frankenstein]

Mmmm.. some people have taking a pretty massive hit on this one getting out today!

This is just silly - was desperate to get out but at these prices I'm holding. I calculate $4-$4.20 to be fair value, no need to go below that. I'm logging out of Direct Broking and getting on with some real work. Will check back this arvo.

Anybody with me?

Anyone?

[Wolf]

I'm out at 4.18 :( invested 3k lost about $800. Peanuts to you guys alot to me. Aaah well not going to look at shares for a couple months.

[bull....]

This is just silly - was desperate to get out but at these prices I'm holding. I calculate $4-$4.20 to be fair value, no need to go below that.

Anybody with me?

Anyone?

how can you calc fair value when you dont know there actual figures for last few yrs haha make me laugh buy at your peril

[bonne vie]

Can we take comfort that the price so far has been driven down by only 67 thousand shares trading out if 83 million shares today. Grasping at straws here. Missed Fridays trading - out of range.

[Mista_Trix]

I'm out at 4.18 :( invested 3k lost about $800. Peanuts to you guys alot to me. Aaah well not going to look at shares for a couple months.

Was this part of a balanced portfolio?
If you're new and don't have much money to throw at it (like I haven't / didn't / don't) buy in $1500 lots and diversify, consider the amount you pay to your broker a learning cost. You'll build up money over time and eventually be able to buy in larger batches with the profits combined with additional money you put in.
DIVERSIFY... especially when learning :)

[Frankenstein]

how can you calc fair value when you dont know there actual figures for last few yrs haha make me laugh buy at your peril

To be clear I'm certainly not buying, just not selling.

[robbo24]

Don't forget yanks having their scrap will have more than a small effect on stocks - especially this one.

[tosspot]

wow this is painful. I may aswell hold now in the hope that this company is bought out or they announce a new product or business revamp asap. if it goes below $4 then its time to really worry

[lastmoa]

Sure has been some feverish selling. Can't part-take in the selling at these crazy prices. 25% down in two trading sessions. Sure the news was not what we hoped, but DIL does still make good money, impressive customer retention with up-selling, and does have a $50mill cash balance.
I do expect an uptick from these oversold levels.

[Wolf]

Was this part of a balanced portfolio?
If you're new and don't have much money to throw at it (like I haven't / didn't / don't) buy in $1500 lots and diversify, consider the amount you pay to your broker a learning cost. You'll build up money over time and eventually be able to buy in larger batches with the profits combined with additional money you put in.
DIVERSIFY... especially when learning :)

Cheers Mista. I am quite diversified it just wiped the years profit on my shares away. Just hurts a bit hah.

Cheers Moosie i'm far off quitting just taking a break life is too busy at the moment. Which like you say is where the true riches are.

[Slowlearna]

3.50 next stop

how sure are you?

[zigzag]

Sure has been some feverish selling. Can't part-take in the selling at these crazy prices. 25% down in two trading sessions. Sure the news was not what we hoped, but DIL does still make good money, impressive customer retention with up-selling, and does have a $50mill cash balance.
I do expect an uptick from these oversold levels.

Agreed Dellow. I think a number of people on this forum have collectively talked themselves into some kind of negative funk.This could be a good opportunity to top up.

[Lorne Ranger]

No point jumping when the lift has already hit the ground. Feels like an over-reaction to me after months of pent-up anxiety, understandable. Ive discretely moved my Dil holding back into the longer term folio, but I think panic sellers must be getting thin by now, especially at these prices. Thank God for Xero having a good day!

[Lorne Ranger]

PS sad to see our Moose go rabid and run in the OTHER direction! ; ) We forgive you!!

[bull....]

how sure are you?

im happy with my analysis but nothings guaranteed and of course it could go much lower than 3.50 if an when updated figures come out and they are not as good as im thinking hey but please check with ya financial advisor about anything cause they are much smarter than me. lol

[Baddarcy]

looks to be settling down? 5 minutes without a trade

[bull....]

you had the over reaction a month ago stock down too 4.30 then bounced back up with in a week to $6. That was an easy one too spot.
I am surprised it has fallen this fast but the market is revalueing the stock this time

didnt it bounce because broker put buy on it?

[Whipmoney]

My father's broker (ASB) has said it's worth $8. I see a trend here...

To be fair you were projecting it to go a lot higher next year..

It's all just guesstimates anyway.. everybody has different perspectives on growth, profitability, risk & rewards and whether you use TA or FA, Quantative backtesting, charts, random walk, crystal balls or even elephant migratory patterns to plot its course.. nobody can or will get it 100% right.

I'm not going to lie, i've just had a huge chunk of my capital wiped in just two days trading but i'm not even despondent.. the only regret that I really have is that I don't have access to more capital to take advantage of the dip.

[Monty]

Share price now at less than 50% of its peak some months ago. When or if it gets to $$3:80 I am in for as many as I could afford.

[CJ]

My father's broker (ASB) has said it's worth $8. I see a trend here...Doesn't ASB use Morningstar?

My personal thought is this drop is a bit extreme. There was very little news in the announcement and that was to be expected. Time will tell.

[Slowlearna]

...and then the next wave hits!

but in all seriousness, $4.00 may be your major support and buy opportunity.

I'm with bull.... all they way to $3.5

[Banksie]

Doesn't ASB use Morningstar?

Yes CJ - ASB use MorningStar.

[JayRiggs]

I am holding at an average price of about 6.15, so I'm feeling the burn!
I didn't sell, because I'm more of a buy and holder, and I'm hopeless at trading in and out of stocks.

DIL is still a good company generating profits. Problem is me and some other folks here have paid too much for DIL. I take comfort that at least this isn't a stinker like RAK.

Good opportunity to top up in the $3s, but I think I'm going to wait until the restatement before taking action.
US stock futures pointing to a down day tomorrow. It's gonna be a bumpy ride.

[blobbles]

Doesn't ASB use Morningstar?

My personal thought is this drop is a bit extreme. There was very little news in the announcement and that was to be expected. Time will tell.

I don't think it's extreme. DIL is now not a company whose customers are growing exponentially. They are a normalised growth company instead. This means the people that use the P/E measure of future value have downgraded their expectations considerably. Look for a whole lot of revaluation metrics coming out from brokers, probably in the $5-$6 mark.

[Xerof]

it bounced because it was an over reaction to the information available at the time.

correct

this time however, it closed Friday on its low, has gapped lower on todays open, and is stabilising near its lows. This is not an over-reaction......so far anyway.

for me, I will wait for the restatements now, despite the price looking attractive in the 3's.

[Food4Thought]

How attractive will this stock be, along with XERO if the situation in America is not resolved. It could be a historical event, even bigger then what it currently is... if your still in the black, it may be a good time to take your winnings...or cut your losses. It was 10c after all not too long ago

[Lotto]

Cor-Blimey - lots of discussion on this one.
Typical example of how Markets react to Companies. "Up and Down" or "in favour or not"

[CJ]

I don't think it's extreme. DIL is now not a company whose customers are growing exponentially. They are a normalised growth company instead. This means the people that use the P/E measure of future value have downgraded their expectations considerably. Look for a whole lot of revaluation metrics coming out from brokers, probably in the $5-$6 mark.I said a bit extreme, not completely extreme ;)

Cashflow is up so it definitely wasn't a negative announcement.

There was very little info in the announcement and one quarter does not make a trend.

Given that power companies trade on a PE of 20, DIL is a high growth (not exponential) company with alot of potential.

Disc: Hold. Price is still above my average purchase price with the only purchase above current price being last time it dipped/plummeted.

[Joshuatree]

Impeccable timing and factual info Sparky , thanks

[robbo24]

Hello all.

When the student is ready the teacher will appear...

[Whipmoney]

Sparky ... Care to challenge my assertions too? ;)

Your assertions.. lol what were they? A P/E of 10...

[winner69]

Sparky ... Care to challenge my assertions too? ;)

Probably can't mate

Careful mate .....you'll get a telling off as well

At least he has cheered up a few who needed a bit of comforting

Belg ...but i bet you were impressed with the great development in the last announcement that users can manage and customize their sticky notes to save annotations in particular sections

[winner69]

Your assertions.. lol what were they? A P/E of 10...

Based on sparks comments about those margins etc maybe already there

[Whipmoney]

Sorry Whippersnapper, can't really help people who can't read.

I think you should expand the the above to say that you can't really help anybody at all.

For the record:


The drift down to a PE of 10 - about $1.50 - will probably take no more than 6 months.

[Whipmoney]

The problem is not the current revenue or cashflow of the company. The problem is the value being ascribed to future revenues and cashflows.
Lets compare MNF (on the ASX) a similar sized company ($46m revenue), with NPAT growth of 35% last FY, strong cashflows, pays a dividend, strong organic growth plus acquistions, and yet its market cap is AU$89 million and its P/E is 20. Compare DIL with a current market cap of $351 million and a P/E of 43 (based on FY Dec 12 EPS figures). DIL might still be a great little business with good revenue growth and cashflows - but it needs to be valued like MNF not Facebook.

I've had a (very) quick skim of the 2013 Annual Reports from your example above and I must say that its not a very fair comparison.

Reasons below:

1) Sales - MNF 2013 sales are in line with DIL's for 2012. Fair enough but what about deferred revenues? Assuming DIL's 97% retention rate holds then it will also convert ~97% of its $17m FY12 deferred revenues into sales right off the bat. That's ~36% revenue growth even before you factor in NEW Growth from additional licence sales/upgrades.

2) Gross Margin - DIL (~77%) has a lot sharper gross margin than MNF (~38%) meaning a larger fraction of their revenue growth hits the bottom line.

3) NPAT - While they may have comparable NPAT growth DIL's FY12 NPAT is roughly 3x larger than MNF's FY13 figure.

3) Assets - DIL has a bucket load of cash and no external LT debt. The bulk of their liabilities (~74%) are deferred revenues which are both more than offset by cash and which will actually get expensed through their P&L at a fraction of their face value (say 40% to be highly conservative). If 40% are expensed then DIL will keep ~60% as NPBT in the following financial year. MNF on the other hand have a reasonable amount of trade (i.e. real debtors) at ~67% of total liabilities.

Those are just a few reasons why they differ and why there's probably a big variance in their respective P/E's.

Thanks for the example though, was good to look at something different for once :)

[Dej]

South of $5 in a years time? Why do you say that Croesus?

And yes, I am happy to take that wager! I say north of $10 in a year (USD that is) ;)

Looks like Croesus got a head start :P

[winner69]

Kw - people here say that the options when they get converted wont have any impact on the hare price .....factored in they say ....everybody knows there really 120m shares .....can't argue with their logic can we

Ok that means the 43 pe you quote is really about 60 if you use 120m shares

[winner69]

Interesting little piece

http://kellblog.com/2013/06/05/what-drives-saas-company-valuation-growth/

Look at the charts ...good eh

The conclusion the guy made was this, just like kw was saying

. As you can see, there’s basically no reward for profitability. In real estate what matters is location, location, location. In SaaS, it’s growth, growth, and growth.

[winner69]

If that chart showing growth v sales multiplier is how peers are valued DIL should only be at bet 4 times sales (ev of 250m or as no debt and we ignore the cash a market cap of is) .....that's a $1 plus off h share price.

As kw points out as forward growth slows (or doesn't meet expectations) that sales multiplier falls ...spooky eh

[winner69]

I am assuming DIL is a saas related company ....isn't it?

[Baddarcy]

looks like the day traders are exiting stage left

[jamiec26]

I was trying to find a few videos on DIL's boardbooks platform earlier today, couldn't find any. The competitors products look quite sharp but still very easy to replicate. http://www.youtube.com/watch?v=I8B1Wp8dUpw

[Dej]

Yup, traders had firm control today. Ouch, going to bottom out near $4. Sorry for holders, but I'm glad I did my research, re-strategised and got the f*** out!

More money for PEB?

[Whipmoney]

As I've pointed out repeatedly - that's a huge assumption - the current vs. future thing.

My responses were in relation to K.W's comparison of two markedly different companies.


Pray for a takeover whipsnapper - and soon - I think its the only hope you've got.

We'll see Belg.... we'll see.

[winner69]

Research out thus far. FNZC target price revised downwards from 6.60 to 5.40 and Deutsche Bank from 7.20 to 6.60.

Less the analyst premium usually built in and it realy valued between 430 and 530

Wouldn't want to be seen to be so wrong in th first instance .....so take a chunk off now and give punters a bit of hope before we go tak another chunk off

[winner69]

Research out thus far. FNZC target price revised downwards from 6.60 to 5.40 and Deutsche Bank from 7.20 to 6.60.


Mac will be disappointed ...he though they would nudge their valuations up a bit

Maybe they irrational as well

[JohnnyTheHorse]

This is going to be a traders dream either tomorrow or Wednesday. Nothing like utter panic to get to extremely oversold levels before the traders charge it back up. Has happened many times with this stock the last few months, so I'm sure they'll be keen to do it again. I suspect we will see $4.80 hit later this week.

[MAC]

Mac will be disappointed ...he though they would nudge their valuations up a bit

Maybe they irrational as well

Yes, it is actually possible, under some scenarios, that some brokers may raise their valuations next month, as we know some of the brokers have conservatively built in less than favourable potential outcomes from the restatement assessment, Deutsche bank is known to be one, if the restatements are neutral then their valuation may be low.

Once again just for you Winner, I also intend to update when all the data is available and the outcome of the restatements is known on October 28th. Something better done with all of the facts and less of the speculation.

[Bjauck]

Life in NZ share market can be like whacking a pinata...sometimes you get a box of chocolates, sometimes you get whacked by an paper ass. Apologies to Gump.
Disc. Small holding in DIL following Belgarion's opt 4

[robbo24]

I think with all that extra money on the heap they could get some sales staff and pump out products that disseminate information further down the corporate structure - two easy ways to send belg and winner back to their respective graph-lairs for a while.

I've seen some other products names thrown around on here - it could be the best product in the world but without significant training and support they aren't as useful. How do they compare to the "full service" of DIL?

[psychic]

Well I reckon she has been oversold a little. I've bought back in on lows today. We will see.
cheers

[Xerof]

we're at exactly 50% fibonnacci retracement from $8.20

so, $3.26 should be quite reliable support then

[winner69]

The line on the chart is essentially (Growth Rate % / 10) + 1 = Revenue Multiplier

So 'best fit' valuation at the 50% growth rate (the number touted on this site) is 6 times revenue (even though it was close to 10 times)

At 40% growth then 5 times revenue etc

[winner69]

so, $3.26 should be quite reliable support then

High was 820 - what was the low you are using to get this number Xerof

[Xerof]

I was using 20 cents, but I think the true low was 7, so 318 should be more reliable than 326.... sorry

61.8% is far more mystical than 50%, and has a nice resonance to it, don't you think? :mellow:

[Xerof]

Did you notice? We now we have a second breakaway gap in the past 4 months - tsk tsk

[Hoop]

http://i458.photobucket.com/albums/qq306/Hoop_1/DIL14102013.gif (http://s458.photobucket.com/user/Hoop_1/media/DIL14102013.gif.html)

[Food4Thought]

http://i458.photobucket.com/albums/qq306/Hoop_1/DIL14102013.gif (http://s458.photobucket.com/user/Hoop_1/media/DIL14102013.gif.html)

Excellent work Hoop

Also not so good...

http://www.youtube.com/watch?v=4hgA9j-4dB0

is it allowed to post these links here?

[Hoop]

Did you notice? We now we have a second breakaway gap in the past 4 months - tsk tsk

That re-assumed primary up trend line at the conjunction area pushed DIL's price marginally back to the Bull Market Cycle Status...so yeah... this was another Breakaway gap indicating a change of trend again.................soooo........back to Bear market Cycle it seems:(.......Ground Hog day......so do what you did before to make a few $$$.....A little tail on the candle today is showing a little buyer support emerging.. Hmmmm maybe tomorrow is entry day

[Huskeez]

http://i458.photobucket.com/albums/qq306/Hoop_1/DIL14102013.gif (http://s458.photobucket.com/user/Hoop_1/media/DIL14102013.gif.html)



No offence , but drawing a whole lot of lines after the fact is not very impressive...my little brother could do it , who does this help ? Does it help people understand better and prepare for next time? Not really... all of this is historical? What's the point? Your just drawing lines on price action which has already happened... connecting dots on a bunch of lagging indicators.

[winner69]

No offence , but drawing a whole lot of lines after the fact is not very impressive...my little brother could do it , who does this help ? Does it help people understand better and prepare feor next time? Not really... all of this is historical? What's the point? Your just drawing lines on price action which has already happened... connecting dots on a bunch of lagging indicators.

You have to admire the beauty of those lines though husky.

Might be after the fact but those lines represent negative market sentiment towards DIL since June, with the odd burst of hope and optimism thrown in. Those bursts of hope come to an end when the company disappoints with not so good news.

Powerful story eh husky .....markets don't do this for 4 months or so without reason ...market saying DIL not living up to lofty expectations. That is not irrational behaviour.

Husky ....you must have some sort of way of assessing what DIL worth ...even if gut feel. Bet that takes what you know about business models, market, growth rates, retention rates, increasing margins etc etc ......but I bet you take these and extrapolate into the future ,,,,,,whops that sounds like drawing lines (in you mind) and extending them out a few years ....after the fact stuff assumed to continue?

Hope hoop doesn't extend those lines on his chart

Just remember that the lines represent market sentiment ....not just price

[False Profit]

I think it is like everything, there are differing levels of expertise. There are a lot of amateurs whose constant flawed ridiculous predictions on many threads discredit that whole analysis sector. However, the most amazing thing I have learned in the past few days, is that it appears that the oft chanted DYOR means no more than believe the hype and drivel, rather than actually try to learn about the company and sector you are investing in.

I think the DYOR is a long term advantage in that if a company has all it's 'i's dotted and its 't's crossed the share price will most likely rise regardless of sentiment. The fact that investors can be as skittish as a cat on a hot tin roof and remove their investment willy nilly is a thorn that will most likely correct itself over time.

I learned quickly not to put too much credibility into poster's 'learned' comments. The nonsense 'buy buy' rantings of those in the SNK camp just before it lost 50% of its share price was one. The after comments being "get out of this donkey' from the same people claiming it to be a sure thing.

DYOR and stick to your convictions. Time is on our side.:t_up:

[blackcap]

I think it is like everything, there are differing levels of expertise. There are a lot of amateurs whose constant flawed ridiculous predictions on many threads discredit that whole analysis sector. However, the most amazing thing I have learned in the past few days, is that it appears that the oft chanted DYOR means no more than believe the hype and drivel, rather than actually try to learn about the company and sector you are investing in.

So true. Was it Lynch that said that people often spend hours trying to find the best airline tickets or hotel options or holiday package, but when it comes to investing in stocks they do a cursory "got a tip from a mate" or that "feels good" analysis. Who here actually spends 5-20 hours(depending on size and complexity of company) doing proper analysis before purchasing a stock. That means reading the last 2-3 years of announcements, 2-3 years for annual reports, checking all the ratios, outstanding options, executive shareholding in a company, the sector itself, cash flow analysis, DCF maybe (but that requires forecasting, difficult at best of times) and calling the company to talk to the CFO or other executive to garner some further snippets?
Then again EMH says doing all of the above is a waste of time as all other participants in the market have already done that for you :)

[karen1]

I think it is like everything, there are differing levels of expertise. There are a lot of amateurs whose constant flawed ridiculous predictions on many threads discredit that whole analysis sector. However, the most amazing thing I have learned in the past few days, is that it appears that the oft chanted DYOR means no more than believe the hype and drivel, rather than actually try to learn about the company and sector you are investing in.

Well put Sir!

[CJ]

Revenue recognition for Internet start ups: "we estimate".

Guess the company:

http://finance.fortune.cnn.com/2013/10/14/twitter-revenue-recognition/

[Whipmoney]

Might be after the fact but those lines represent negative market sentiment towards DIL since June, with the odd burst of hope and optimism thrown in. Those bursts of hope come to an end when the company disappoints with not so good news.

Powerful story eh husky .....markets don't do this for 4 months or so without reason ...market saying DIL not living up to lofty expectations. That is not irrational behaviour.

1) Negative sentiment from market can be one of the best times to buy.

2) Markets can be irrational for a lot longer than 4 months my friend... you just have to take a look at the Dot Com boom/bust.

[Baddarcy]

So we going , up up up, down some more or round in circles today? Anyone prepared to have a punt? My guess is today will end with a green arrow.

[robbo24]

So we going , up up up, down some more or round in circles today? Anyone prepared to have a punt? My guess is today will end with a green arrow.

I think we should keep on banging the "DIL IS WORTHLESS 4X MULTIPLIER" drum some more. Let's get this sucker into "Irrational Red Arrow" territory then buy some ourselves. Isn't that what this forum is for?

[Hoop]

No offence , but drawing a whole lot of lines after the fact is not very impressive...my little brother could do it , who does this help ? Does it help people understand better and prepare for next time? Not really... all of this is historical? What's the point? Your just drawing lines on price action which has already happened... connecting dots on a bunch of lagging indicators.

I sold out on the red dotted line (end Sept):)...did you???
Now waiting for the short term chart buy signals

[Lorne Ranger]

I sold out on the red dotted line (end Sept):)...did you???
Now waiting for the short term chart buy signals

Glad for you Hoop. But in my opinion its disingenuous to use your system to report on events after the fact in this case. You dont need such analysis to have been aware of the underlying negative sentiment towards DIL in the last several months, all you needed to be was on planet Earth and connected to a news source. I think most if not all people knew that already. The drop over the months seemed to be fueled by intolerance of the restatements delayed and a period of short selling, and when it finally broke the down trend it was capped and tapered by the market awaiting the news that came out on friday. In hindsight it was smarter to get out or reduce holding midweek to lower exposure to bad news, but no lines analysis was going to predict that result, at best to give a taste of what the reaction would be, which even then seems excessive to me. what would have happened if the sale result was the same as the previous quarter (ie they sold a mere 40 more contracts over 3 months)? Same result?

As you can tell personally not a fan of lines in such complex cases as Dil. But if enough people adhere to them then yes they create their own reality just by existing and being followed.

[robbo24]

are you calling my forecast for PEB at 40 cents a spot of Canadian witchcraft then?... Knowledge is power... :)

Then there's the SNK, NTL and DIL which suggest the Canadian witchcraft needs a bit of revision...

[robbo24]

I just kidded myself into thinking I was a long-termer at the exact wrong time for DIL and lost quite a bit.

I'm not sweating you man. This thread has nearly 360,000 views, all I'm saying is that there is sure to be people going with the current popular viewpoint on the thread at any given moment... With that in mind, an anonymous internet forum is a great place to do some talking up and talking down to help fuel your own prophecy... I like Hoop's charts because (while being retrospective) they show his working as to how he arrived at a result - more than can be said about a lot of comments on here.

[Whipmoney]

Glad for you Hoop. But in my opinion its disingenuous to use your system to report on events after the fact in this case. You dont need such analysis to have been aware of the underlying negative sentiment towards DIL in the last several months, all you needed to be was on planet Earth and connected to a news source. I think most if not all people knew that already. The drop over the months seemed to be fueled by intolerance of the restatements delayed and a period of short selling, and when it finally broke the down trend it was capped and tapered by the market awaiting the news that came out on friday. In hindsight it was smarter to get out or reduce holding midweek to lower exposure to bad news, but no lines analysis was going to predict that result, at best to give a taste of what the reaction would be, which even then seems excessive to me. what would have happened if the sale result was the same as the previous quarter (ie they sold a mere 40 more contracts over 3 months)? Same result?

As you can tell personally not a fan of lines in such complex cases as Dil. But if enough people adhere to them then yes they create their own reality just by existing and being followed.

Exactly.. neither TA (or FA for that matter) could have predicted the exact number of licence sales in Q3 which was ultimately the principal driver of the recent SP decline.

If DIL had of posted 304 licence sales in Q3 then we probably would have seen the complete opposite reaction in which case HOOP could have done all the TA in the world and have been horribly wrong.

Providing a TA chart with the benefit of hindsight shows us nothing other than the simple fact that you have fallen subject to confirmation bias.

[Huskeez]

I sold out on the red dotted line (end Sept):)...did you???
Now waiting for the short term chart buy signals

I havent been in this stock since June, i voiced my opinion on this forum around that time aswel about how i couldnt understand how people could see the stock as a buying oppurtunity given the price action at the time.

[Huskeez]

If that's the case then Lorne, are you calling my forecast for PEB at 40 cents a spot of Canadian witchcraft then? I would like to see PEB go to the moon, but I fear there is stilla little more pain ahead before we see the very, very bright light of the future.

TA would also have told you to buy XRO yesterday below $20 as it is going into yet another uptrend channel, and where it stops we don't know, so it's not just backwards looking!

No offence, it's just that TA and FA can work very, very well when used together.

Knowledge is power... :)


Exactly.. neither TA (or FA for that matter) could have predicted the exact number of licence sales in Q3 which was ultimately the principal driver of the recent SP decline.

If DIL had of posted 304 licence sales in Q3 then we probably would have seen the complete opposite reaction in which case HOOP could have done all the TA in the world and have been horribly wrong.

Providing a TA chart with the benefit of hindsight shows us nothing other than the simple fact that you have fallen subject to confirmation bias.

There is there. "Confirmation Bias". You hit the nail on the head.

Which is my main problem with indicators/oscillators. You will see what you want to see whethers its there or not.

[blackcap]

Personally I believe TA is a load of mumbo jumbo (an art if you like) and do not use it myself. It looks good, the math behind it may seem compelling but to me it adds little. Often you see posters with nice charts etc but it is almost always retrospective. The past does not predict the future. In the case of DIL, the charts may have been saying sell and the bad announcement confirmed this. But had the announcement been positive.... then the chartist is left floundering or alternatively some would have retrospectively made a "double top butterfly occilating schochastic head and shoulders" to say "hey look there was the turning point. I just dont buy it. I have yet to meet a TA proponent that outperforms the market consistently year in year out. But in some fields (im thinking currency) it can be useful in that it is so widely used it becomes a self fulfilling prophecy.

[CJ]

But had the announcement been positive.... Exactly - TA cant predict fundimentals.

And with shares like DIL and XRO they tend to gap up/down on news.

[Whipmoney]

It looks good, the math behind it may seem compelling but to me it adds little.

There is very little math behind it if any. In fact, almost all of the evidence for TA is anecdotal.

[Whipmoney]

And yet getting out at the inflection point circa 7.00 would have seen you better off by some $2.70 per share ... Yip Whippersnapper, no doubt about it, TA is a waste of time. ;)

Even if you were in the Stock and got out at $7 (based on your TA), then I have to ask if your TA is so predictive/effective then why didn't you get out at around $8 only four days beforehand?

Oh that's right because your chart was still predicting a positive uptrend..

[Whipmoney]

Check out the Arora Report and the ZYX method for stock picking if you think TA is a load of (insert expletive). Has not been wrong for gold and am still following it to look for a buy in on the bottom there...

That's quant analysis mate (using statistical methods to chase alpha) with a little bit of TA sprinkled on top.

Its a bit different to starring at a chart and drawing lines to predict the future price.

Also:

1) Even if this method is successful it will be replicated to the point where it no longer works.

2) I note this guy has some pretty heavy credentials in engineering. Whilst that may help add to the credibility of his system (which I can't really comment on) I also note that the guys behind LTCM had even heavier credentials in Math & Econ and we all know what happened to them...

[Whipmoney]

Mmm, sounds tasty! *drool*

Would you buy it more than simple TA then?

That depends on the strength/effectivness of his quant model. For one thing at least a quant model can be back-tested with empirical data to check its validity, which is a lot more than I can say for TA. On the other hand, I wouldn't invest in gold or precious metals period.

In terms of quantitative analysis, Wall St/London etc all have quant desks whereas TA desks are practically unheard of in the Institutional world. I suspect there's a pretty good reason why..

[Whipmoney]

Mmm, sounds tasty! *drool*

Would you buy it more than simple TA then?

That depends on the strength/effectivness of his quant model. For one thing at least a quant model can be back-tested with empirical data to check its validity, which is a lot more than I can say for TA. On the other hand, I wouldn't invest in gold or precious metals period.

In terms of quantitative analysis, Wall St/London etc all have quant desks whereas TA desks are practically unheard of in the Institutional world. I suspect there's a pretty good reason why..

[Huskeez]

If that's the case then Lorne, are you calling my forecast for PEB at 40 cents a spot of Canadian witchcraft then? I would like to see PEB go to the moon, but I fear there is stilla little more pain ahead before we see the very, very bright light of the future.

TA would also have told you to buy XRO yesterday below $20 as it is going into yet another uptrend channel, and where it stops we don't know, so it's not just backwards looking!

No offence, it's just that TA and FA can work very, very well when used together.

Knowledge is power... :)


Exactly.. neither TA (or FA for that matter) could have predicted the exact number of licence sales in Q3 which was ultimately the principal driver of the recent SP decline.

If DIL had of posted 304 licence sales in Q3 then we probably would have seen the complete opposite reaction in which case HOOP could have done all the TA in the world and have been horribly wrong.

Providing a TA chart with the benefit of hindsight shows us nothing other than the simple fact that you have fallen subject to confirmation bias.


That depends on the strength/effectivness of his quant model. For one thing at least a quant model can be back-tested with empirical data to check its validity, which is a lot more than I can say for TA. On the other hand, I wouldn't invest in gold or precious metals period.

In terms of quantitative analysis, Wall St/London etc all have quant desks whereas TA desks are practically unheard of in the Institutional world. I suspect there's a pretty good reason why..


That depends on the strength/effectivness of his quant model. For one thing at least a quant model can be back-tested with empirical data to check its validity, which is a lot more than I can say for TA. On the other hand, I wouldn't invest in gold or precious metals period.

In terms of quantitative analysis, Wall St/London etc all have quant desks whereas TA desks are practically unheard of in the Institutional world. I suspect there's a pretty good reason why..

Yes this is very true, my mentor is from the states and has worked in the mutual fund/hedge fund industry and has pointed out to me numerous times about how the top traders do not use charts/indicators. Purely algorithms based on price action.

[MAC]

It would seem to me that if you are experienced in either FA or TA or both, well practiced, and good at what you do, then you will be rewarded.

There are both very successful fundamental investors and technical traders in NZ, although I’ve never actually met a successful technical trader, perhaps they are just more modest ?

[Hoop]

There is there. "Confirmation Bias". You hit the nail on the head.

Which is my main problem with indicators/oscillators. You will see what you want to see whethers its there or not.

Hi Huskeez....Whipmoney...

I can understand you and others criticisms of Charts..

Charts are just plotted event histories
With stocks the charts are a history of fluctuating prices from the trading of the herd...Therefore herd behaviour can be analysed and displayed using various lines and specific indicators....

FA or TA can not predict the future 100%..FA draws from the financial past and applies "the now" or an "assumed" future environment to draw a forward outcome with a better than random probability of happening...TA works less with financials, assumes EMH and uses herd trading behaviour......behavioural patterns are picked up and as behaviour is rather predictable at certain times a probability of happening can be assessed..
OK..I know both FA and TA have their strengths....and being an ex-fundie I can't bag FA...but ...TA strength over FA is that TA has information about "the now" FA has to rely somewhat on financial snapshots from months ago and on update disclosures .... in DIL case.......?????????????????? investors really hate?????...eh.....Sometimes TA picks up rumours or insider leaks before an announcement...

"You will see what you want to see whethers its there or not"............... A unskilled TA looking at a chart...yes I agree...skilled chartists ...no disagree..It all has to do with the knowledge you've learn't which gives you a "trained eye"....for example I'm going to be a first time granddad :cool: and my daughter showed me her ultrasound picture of the baby ..when I first saw the picture I couldn't see the baby less alone the sex, its arms, legs, or head.. left to my imagination I could've seen spiders:).....once explained to me I could see him easily.... Perception!!!!!

It took ages for me to learn the numerous patterns and be able to mentally recall them to correctly perceive them on a chart....Until that time there is no confidence or belief.......even the thought of spending money to buy a stock due to its chart pattern signal or lines seemed totally wrong.

[skid]

Good point, thanks for that Whip.

Getting my trader hat on again, anything is in fashion to be traded by moi. My sister asked me if I felt bad for investing in RAK (back around 55 cents, made money off it too!) and I said "no, in fact I hope they send me some spare missiles and guidance systems they probably have lying around from their backdated catalogues!" Fact is, we're all in this for money ( I do have some ethics still; I refuse to buy SNK knowing that Sorenson will fleece NZ investors on a Mega/Baboom IPO), and anything that helps I will use!

You dont want to buy snk because sorenson going to fleece nz investors--but missiles and guidance systems are ok--interesting priorities..

[Baddarcy]

Is there a sell bot active this afternoon?

[skid]

Well,I sincerely hope you never experience the deadly irony of being on the receiving end of one of the products you invested in -(or seeing the first hand the result)
Plenty of other shares to use your youthful energy and knowledge on

[Mista_Trix]

I am a FA investor. Over 10 years I made a lot of money, bought a house in 2008 with cash, and still had money left over. I added TA 2 years ago and now I make a sh*tload more and no longer have to work for a living. Using TA was the best thing I ever did, it substantially reduced my investing mistakes and ensures that I "cut losses and let profits run".

TA doesnt predict the future, if that is what you think it purports to do then you don't understand it. It provides a probability factor for future events - is xyz more or less likely to happen in the future based on current and past investor actions? Its also a very accurate measurement of risk. TA measures the "behaviour" part of behavioural economics and market theory. As emotion is an important factor in driving the market, it is extremely important to have a tool that measures that emotion and tells you where on the curve it is. Indicators smooth out the noise of daily fluctuations and gives a longer term "emotional temperature" of a stock. You ignore market sentiment at your own risk.

And on a practical level, you can be stuck waiting years for the market to realise the "value" that you firmly believe a stock has. Far easier to only have to wait days or weeks once a new uptrend has appeared. Likewise, how much money are you prepared to lose on a stock that is slipping into a downtrend? Again, better to get out when a confirmed downtrend is in play, then to ignore your losses for months or years while pretending that its a "long term hold".

What's your main FA calculation of choice? What TA metrics do you prefer?
I think a combo is by far preferable to either or.

[bull....]

[QUOTE=Whipmoney;432935]That's quant analysis mate (using statistical methods to chase alpha) with a little bit of TA sprinkled on top.

Its a bit different to starring at a chart and drawing lines to predict the future price.

Also:

1) Even if this method is successful it will be replicated to the point where it no longer works.


yea thats why they called black box systems

and t/a booers should check out this list of sucessful people

http://etfhq.com/blog/2013/03/02/top-technical-analysts/

anyway all methods are good in the right hands and all methods have to predict the future lol

[robbo24]

The NZD is pretty high against USD on back of default risk.

It also looks like Moosie's mates The Yanks aren't going to let themselves default...

NZD may fall a little against USD.

Both good for DIL stocks.

Perhaps some correlation there too... Although XRO seems to discount that.

[Lorne Ranger]

NZD may fall a little against USD.

Perhaps some correlation there too... Although XRO seems to discount that.

Maybe so. (Not sure you can use Xero to measure anything right now though, seems to be a whole new law of SPhysics. Anti-gravity perhaps).

Im thinking unless announcements from Dil board, which lets face it is unlikely given past history, SP is going to hover around this level until end of the month. Dare I say holding out for Q4 results........ finding reserves of patience didnt know I had.....

[robbo24]

All those TAers out there will be checking to see if the divergence lows hit new lows - holla

[JohnnyTheHorse]

Failed attempt at recovering today, however there was some good buyer support appearing at close. Will be watching at the ready for a trade tomorrow. I do feel that whilst the latest sales figures were disappointing, the market has over reacted massively and there is a lot of scaremongering going on this forum - possibly trying to induce selling to buy at an even cheaper price, or they are simply 'trolling'. The comparisons with other companies based on sales multiplies is completely pointless, what matters is the MARGIN on those sales. DIL know that new sales growth was also going to slow down (not NPAT growth however, as it's a SaaS company with a 97% retention rate) and are therefore working on something new to bring in new revenue streams. From what I have been hearing they have been working on this for around a year so far - that is a reasonably long time in software development so I would be expecting something quite substantial.

The people that have bandied around a fair PE value of 10-15 make me laugh. Even the zero growth power companies with large political risks and uncertainties are trading on PE's around or above 20! Get real folks. This drop has largely been fueled by amateur investors and people whose margin lending on DIL has gone pear shaped. DIL isn't currently the flavor of the month, but it will shine again.

[Whipmoney]

yea thats why they called black box systems

and t/a booers should check out this list of sucessful people

http://etfhq.com/blog/2013/03/02/top-technical-analysts/

anyway all methods are good in the right hands and all methods have to predict the future lol

Thanks for the link but I see that all of those on the second half of the last "Word's Richest T/A Traders" are actually all quant investors. There is a big difference.

[jamiec26]

what is the new product they are about to release, do we have any idea's of what it is?

[bull....]

Thanks for the link but I see that all of those on the second half of the last "Word's Richest T/A Traders" are actually all quant investors. There is a big difference.

your correct, i guess the t/a people have not been as sucessful as the fa or quants and it is interesting the quants backgrounds are not your typical financial type of person either and some good pointers at the bottom of the article about common traits they all had

[Mobius]

Time to tackle some of the questions raised over the last few days.

1) Is Boardbooks a product which can be easily replicated by a team of coders?

Answer: No, most certainly not.

In theory (which is what Belgie is using) then yes - any group of coders could sit down and write Boardbooks from scratch. But before they did this they'd need a specification, and I suggest to you that no specification can be created for less than half a million, and that without experience in the field, or extensive consultation with many business, the specification is likely to be incomplete. If any one is interested, I'm happy to consult to any developer at $1K a day, as my knowledge of Boardbooks functionality is extensive.

Once you have a specification, you can begin work. It's going to take a team of 8 coders around a year to 18 months to create Boardbooks from scratch. It needs to work in all major browsers, on all major platforms, including iOS and Android. It also needs an iPad app. Good luck with that.

Once you have a functioning code base, you're going to need a lot of testers and QA people, and some extremely competent security and IT people to lock the whole thing down and make it bomb-proof. You also need a hosting environment. And your customers are going to want to audit not only the code base, but the security you've set up too.

Then you need to go out and sell it. Against Boardbooks. Good luck with that too: unless you have many tens of millions of dollars, you won't be able to buy market share by discounting heavily (and with Diligent's expanding margins, do you think they would sit idly by?), and without a reputation, you're going to have to be offering something pretty special when compared to Boardbooks. Can you create something better than the market leader with a decade of experience? I severely doubt that.

You also need a 24/7 worldwide support network, which needs to be many steps above the standard call centre - it needs to be world class. This is going to be one of the most difficult challenges, and is a defining point of difference between Diligent and ALL other companies. No one offers support like Diligent.

You are also going to have to design the product so it can be easily used by people who have very little computer knowledge. That is going to be tricky. I personally trained an 85 year old director who had never used a computer before, to use Boardbooks like a pro in less than an hour. This speaks to the ease of use, and the familiar design of the product. "Boardbooks looks like a book, and works like a book" used to be the catch cry. It's true.

2) Is pricing a factor in Boardbooks sales?

Almost never. Boardbooks is a money-saving product. The average price per year is between 25K and 30K, and this is chicken feed compared to other software solutions used by business. Have Diligent ever lost a sale because of pricing? Almost never. Have Diligent lost sales to other competitors? Almost never - in fact many DIL clients are ex-users of Boardvantage et al. Have Diligent had to discount to get a sale? Almost never. The larger clients do indeed get some discount, but the company tries to discount the installation and setup fees (which can be substantial) rather than the individual user license fees.

3) Is Boardbooks a long term or short term solution for the Boards?

A long term solution. To my knowledge only one company has ever signed up to Boardbooks for anything other than the long term, and this was a company which was in receivership; it nicely allowed the receivers to post all the company's information for easy access. 97% YoY retention tells you this is true. Of the very very many glowing quotes I obtained from my clients, many referred to the fact that if someone tried to take Boardbooks away from the board they would go into revolt. The never-ending list of the most glowing quotes a company could hope for are a testament to the product and the service.

4) Are there genuine competitors to Boardbooks?

No, there are not. While there are some products which theoretically can do some of the things Boardbooks does - not one product does what Boardbooks does - nor is any other product so squarely aimed at the board, and the meetings. You can call Sonya Joyce, and ask for the list of competitors products compared to Boardbooks - I do not think this is a secret document. It clearly shows the differences between Boardbooks and the "competition". When you see it, you understand why Boardbooks has been as successful as it has been, and why it will continue to be successful. It checks every box the board, admin and legal teams want.

5) Can clients exit from Boardbooks cleanly and easily?

This is an unasked, but an important question. Does the software lock a client into Boardbooks in perpetuity? No, definitely not. Boardbooks is specifically designed to allow a client to export all the books as properly indexed and internally linked PDF files, such that a client *could* move to another system, and put their PDFs into it. For many clients this would be a very time consuming process, as many hundreds of books will now be on major clients Boardbooks.

What locks Diligent's clients into the product is the brilliant product itself, and the magic support and account management teams. As a money-saving system, there's no reason to switch, and plenty of reasons to stay.

6) Does the Domino Effect function for Diligent?

Indeed it does. Professional directors often sit on multiple boards, and Diligent always knew that the DE would kick in for DIL once a critical mass of client numbers was achieved. This has been proven true, when sales switched from being all outbound calls to all inbound calls in a fairly short period of time. Boardbooks directors quickly grow tired of paper (or other e-systems!) when they use Boardbooks. Personally, I spoke with many many directors over the years who would tell me that they sit on 4 other boards, and they are determined to get them onto Boardbooks as well. Given how seamlessly Boardbooks allows a single person to access multiple boards across the client list, it's a no-brainer that directors want the convenience extended to their other boards.

7) Does Boardbooks need significant (re)development work to retain existing customers and acquire new ones?

No. The list of features required by directors is a lengthy one, and Boardbooks addresses virtually all of them. Pretty much all new functionality is driven by customer demand, and DIL responds rapidly. In some cases, clients wait until a certain feature is available before signing on the dotted line. Boardbooks has undergone continuous (and I do mean non-stop) development since 2001 when the first lines of code were written.

There is development work required to extend Boardbooks penetration; think Android App.

But there's nothing on the horizon which is going to cost millions. There are at least a dozen programmers working on BB code full time, and fo DIL it's just going to be "more of the same" for the foreseeable future of Boardbooks.

The hard yards have already been gained: Back in the early 00's Boardbooks was written using Lotus Domino (Diligent had a LOT of experience with Domino), but the code was not particularly good, and that platform would not scale nicely to hundreds or thousands of clients. DIL took the view that Boardbooks needed to be completely re-written from the ground up, with not a single line of re-used code.

This allowed the company the luxury of selecting the correct platforms to allow Boardbooks to grow without an army of support and IT people. So, Boardbooks Version 3.0 was commissioned by the company, and a new team of programmers set about the task of recreating the existing Boardbooks product on the new platform.

"Version 3.0" was a watershed for Diligent; it cost in excess of 3 million dollars to develop (IIRC) and remember folks; that was with a product that already existed, and **nothing** new was added to V3.0 - it merely replicated the previous Lotus-based product. It was an immediate success, with support call volumes dropping by a staggering amount. In fact, the lack of calls while the client numbers increased meant I often spent time working as a QA person.

So, Boardbooks now sits on a platform which will see it scale to hundreds of thousands of users very nicely. This was, after all, the reason for the re-write!

You need to remember that Boardbooks is a very sophisticated system already. This is not obvious to users however, as the system is designed to be very simple on the front end, and incredibly complex at the back end. You would be amazed at how difficult it is to shield users from complexity, while offering all the functionality needed. Diligent is most outstanding at achieving this.

-----------------------------------
How many escape pods are there? "NONE, SIR!" You counted them? "TWICE, SIR!"

[MAC]

Mobius, thank you for that post, it’s a pleasure to hear from someone with both the technical expertise and specific industry knowledge.

Have you any insights on the future of the company in taking all that innovation and progressing it into new products within the management information sector, or perhaps even into different customer bases ?



Time to tackle some of the questions raised over the last few days.

1) Is Boardbooks a product which can be easily replicated by a team of coders?

Answer: No, most certainly not.

In theory (which is what Belgie is using) then yes - any group of coders could sit down and write Boardbooks from scratch. But before they did this they'd need a specification, and I suggest to you that no specification can be created for less than half a million, and that without experience in the field, or extensive consultation with many business, the specification is likely to be incomplete. If any one is interested, I'm happy to consult to any developer at $1K a day, as my knowledge of Boardbooks functionality is extensive.

Once you have a specification, you can begin work. It's going to take a team of 8 coders around a year to 18 months to create Boardbooks from scratch. It needs to work in all major browsers, on all major platforms, including iOS and Android. It also needs an iPad app. Good luck with that.

Once you have a functioning code base, you're going to need a lot of testers and QA people, and some extremely competent security and IT people to lock the whole thing down and make it bomb-proof. You also need a hosting environment. And your customers are going to want to audit not only the code base, but the security you've set up too.

Then you need to go out and sell it. Against Boardbooks. Good luck with that too: unless you have many tens of millions of dollars, you won't be able to buy market share by discounting heavily (and with Diligent's expanding margins, do you think they would sit idly by?), and without a reputation, you're going to have to be offering something pretty special when compared to Boardbooks. Can you create something better than the market leader with a decade of experience? I severely doubt that.

You also need a 24/7 worldwide support network, which needs to be many steps above the standard call centre - it needs to be world class. This is going to be one of the most difficult challenges, and is a defining point of difference between Diligent and ALL other companies. No one offers support like Diligent.

You are also going to have to design the product so it can be easily used by people who have very little computer knowledge. That is going to be tricky. I personally trained an 85 year old director who had never used a computer before, to use Boardbooks like a pro in less than an hour. This speaks to the ease of use, and the familiar design of the product. "Boardbooks looks like a book, and works like a book" used to be the catch cry. It's true.

2) Is pricing a factor in Boardbooks sales?

Almost never. Boardbooks is a money-saving product. The average price per year is between 25K and 30K, and this is chicken feed compared to other software solutions used by business. Have Diligent ever lost a sale because of pricing? Almost never. Have Diligent lost sales to other competitors? Almost never - in fact many DIL clients are ex-users of Boardvantage et al. Have Diligent had to discount to get a sale? Almost never. The larger clients do indeed get some discount, but the company tries to discount the installation and setup fees (which can be substantial) rather than the individual user license fees.

3) Is Boardbooks a long term or short term solution for the Boards?

A long term solution. To my knowledge only one company has ever signed up to Boardbooks for anything other than the long term, and this was a company which was in receivership; it nicely allowed the receivers to post all the company's information for easy access. 97% YoY retention tells you this is true. Of the very very many glowing quotes I obtained from my clients, many referred to the fact that if someone tried to take Boardbooks away from the board they would go into revolt. The never-ending list of the most glowing quotes a company could hope for are a testament to the product and the service.

4) Are there genuine competitors to Boardbooks?

No, there are not. While there are some products which theoretically can do some of the things Boardbooks does - not one product does what Boardbooks does - nor is any other product so squarely aimed at the board, and the meetings. You can call Sonya Joyce, and ask for the list of competitors products compared to Boardbooks - I do not think this is a secret document. It clearly shows the differences between Boardbooks and the "competition". When you see it, you understand why Boardbooks has been as successful as it has been, and why it will continue to be successful. It checks every box the board, admin and legal teams want.

5) Can clients exit from Boardbooks cleanly and easily?

This is an unasked, but an important question. Does the software lock a client into Boardbooks in perpetuity? No, definitely not. Boardbooks is specifically designed to allow a client to export all the books as properly indexed and internally linked PDF files, such that a client *could* move to another system, and put their PDFs into it. For many clients this would be a very time consuming process, as many hundreds of books will now be on major clients Boardbooks.

What locks Diligent's clients into the product is the brilliant product itself, and the magic support and account management teams. As a money-saving system, there's no reason to switch, and plenty of reasons to stay.

6) Does the Domino Effect function for Diligent?

Indeed it does. Professional directors often sit on multiple boards, and Diligent always knew that the DE would kick in for DIL once a critical mass of client numbers was achieved. This has been proven true, when sales switched from being all outbound calls to all inbound calls in a fairly short period of time. Boardbooks directors quickly grow tired of paper (or other e-systems!) when they use Boardbooks. Personally, I spoke with many many directors over the years who would tell me that they sit on 4 other boards, and they are determined to get them onto Boardbooks as well. Given how seamlessly Boardbooks allows a single person to access multiple boards across the client list, it's a no-brainer that directors want the convenience extended to their other boards.

7) Does Boardbooks need significant (re)development work to retain existing customers and acquire new ones?

No. The list of features required by directors is a lengthy one, and Boardbooks addresses virtually all of them. Pretty much all new functionality is driven by customer demand, and DIL responds rapidly. In some cases, clients wait until a certain feature is available before signing on the dotted line. Boardbooks has undergone continuous (and I do mean non-stop) development since 2001 when the first lines of code were written.

There is development work required to extend Boardbooks penetration; think Android App.

But there's nothing on the horizon which is going to cost millions. There are at least a dozen programmers working on BB code full time, and fo DIL it's just going to be "more of the same" for the foreseeable future of Boardbooks.

The hard yards have already been gained: Back in the early 00's Boardbooks was written using Lotus Domino (Diligent had a LOT of experience with Domino), but the code was not particularly good, and that platform would not scale nicely to hundreds or thousands of clients. DIL took the view that Boardbooks needed to be completely re-written from the ground up, with not a single line of re-used code.

This allowed the company the luxury of selecting the correct platforms to allow Boardbooks to grow without an army of support and IT people. So, Boardbooks Version 3.0 was commissioned by the company, and a new team of programmers set about the task of recreating the existing Boardbooks product on the new platform.

"Version 3.0" was a watershed for Diligent; it cost in excess of 3 million dollars to develop (IIRC) and remember folks; that was with a product that already existed, and **nothing** new was added to V3.0 - it merely replicated the previous Lotus-based product. It was an immediate success, with support call volumes dropping by a staggering amount. In fact, the lack of calls while the client numbers increased meant I often spent time working as a QA person.

So, Boardbooks now sits on a platform which will see it scale to hundreds of thousands of users very nicely. This was, after all, the reason for the re-write!

You need to remember that Boardbooks is a very sophisticated system already. This is not obvious to users however, as the system is designed to be very simple on the front end, and incredibly complex at the back end. You would be amazed at how difficult it is to shield users from complexity, while offering all the functionality needed. Diligent is most outstanding at achieving this.

-----------------------------------
How many escape pods are there? "NONE, SIR!" You counted them? "TWICE, SIR!"

[psychic]

Thanks for taking the time to write this Mobius. Appreciated

[zgnz]

Yeah thanks again for your point of view Mobius.

Mobius, what's your opinion on the cause of the customer number decline for new sales - in the US?

Do you think they're close to reaching that critical mass/Domino effect Internationally?

[bull....]

nice comment mobius

they may have a nice product but im concerned about the true costs of bringing it to market which could have been hidden in their revenue figures the last few years and may more acuratly show up in there restated revenue figures when released ( which im picking will show much lower revenue figures than given), this may determine to me how good a position they have once we see the true cost of product

[bonne vie]

Mobius thanks - I have been waiting for you to come on line over the last few days. I assume you are a long time hold?
DISC - still holding - maybe got greedy and missed sell points. (learning)

[CJ]

Mobius - thanks for that.

Re could it be copied - I think the likes of Microsoft etc could do it but the market probably isn't big enough for them to worry about. If Revenue isn't over $1B, it just isn't material. Smaller companies could try but will face the issues you meantion.

[Hoop]

How many rules of Buffet-olgy would that be breaking? ;)


Short term TA investor looks to the internet
what's Buffet-ology..???

wikipedia defn ....A buffet (IPA: [ˈbʊfeɪ] (http://en.wikipedia.org/wiki/Help:IPA) in UK, IPA: (http://en.wikipedia.org/wiki/Help:IPA) in US, from French (http://en.wikipedia.org/wiki/French_language): sideboard (http://en.wikipedia.org/wiki/Sideboard)) is a system of serving meals in which food is placed in a public area where the diners generally serve themselves....[B]-ology a combining form used in the names of sciences or bodies of knowledge...

ah ha!!!.... therefore Buffet-ology is a science in serving meals in a public area ;) ...

[Whipmoney]

Short term TA investor looks to the internet
what's Buffet-ology..???

wikipedia defn ....A buffet (IPA: [ˈbʊfeɪ] (http://en.wikipedia.org/wiki/Help:IPA) in UK, IPA: (http://en.wikipedia.org/wiki/Help:IPA) in US, from French (http://en.wikipedia.org/wiki/French_language): sideboard (http://en.wikipedia.org/wiki/Sideboard)) is a system of serving meals in which food is placed in a public area where the diners generally serve themselves....[B]-ology a combining form used in the names of sciences or bodies of knowledge...

ah ha!!!.... therefore Buffet-ology is a science in serving meals in a public area ;) ...

Basically its a Hamburger and a can of coke in some a sh*ty diner in Nebraska, Omaha.

[Hoop]

Ironaically, Skid, I am a pacifist to the core. After studying history and knowing pretty much everything there is to know about WWI and II, I am sickened by war and what it does to people. The only thing I would be blowing up is small items in unpopulated valleys. Can't say you don't like the site of a big fireball or something going Kablooie (as long as no one is involved of course)!

http://i458.photobucket.com/albums/qq306/Hoop_1/DILcartoon.png (http://s458.photobucket.com/user/Hoop_1/media/DILcartoon.png.html)

[Lorne Ranger]

http://i458.photobucket.com/albums/qq306/Hoop_1/DILcartoon.png (http://s458.photobucket.com/user/Hoop_1/media/DILcartoon.png.html)

I bet you're a real blast at funerals.

[Hoop]

Hoop, I've left for greener pastures and made 50% of my losses back in 3 days just for your information. DIL most definitely still on the watchlist :)

WOW!!...well done mate:):cool:

[CJ]

Really? What is IBM's board using? Oracle's board? Adobe? What about NZ's big companies like FBU?Not sure about those but know of at least 1 NZX10 company that uses paper.

[Tony Two Gloves]

Belg, think you might be looking at the wrong line on the DB website, PER is 31.54

[Baddarcy]

hmm bounced off 4.30 again. Winding up for another crack !!

[Mista_Trix]

I wonder if this is as low as its going to get again? Seems like a resistance level given the last couple of months.
Surely all of the negatives are factored in, what more could there be ... really.

[robbo24]

ACC showing it's hand today, first with PEB and now with DIL. No wonder the company has been making a s*** ton of money over the past few years! These guys have some big cajones buying more before re-statement...

They picked them up at 417 average cps - let's see how much money they make!

[Toasty]

I bet the ACC fund guys have a great time. "Where shall we put some of the $5 Billion today guys?" "Lets take a punt on some of these fringy ones. If they go up we'll make a killing. If we blow it no one will ever notice"

[robbo24]

If they make a shedton of DIL I expect ACC levies to come down in the near future thank you very much!

As long as you don't drive a motorbike you'll be getting a nice discount in the not too distant future ;)

[blackcap]

ACC showing it's hand today, first with PEB and now with DIL. No wonder the company has been making a s*** ton of money over the past few years! These guys have some big cajones buying more before re-statement...




Someone may have already said it but seeing ACC on the balance sheet means didly squat. ACC pretty much buys every share on the NZ market over the course of time. The money has to be invested and has to go somewhere. ACC like to take punts.

[Whipmoney]

Someone may have already said it but seeing ACC on the balance sheet means didly squat. ACC pretty much buys every share on the NZ market over the course of time. The money has to be invested and has to go somewhere. ACC like to take punts.

It still means that there's demand for the share which helps support the SP.

[robbo24]

ACC pretty much buys every share on the NZ market over the course of time.

When they buy into SNK and NTL then your argument might stack up... ACC is required by law to invest money as if it were a trustee of the money. That requires ACC to avoid taking punts.

I would come to a general view that ACC pay someone a lot of money to invest of their behalf and they must see value at the current SP.

Chart that.

[Lorne Ranger]

I think given DILs recent SP fortunes, or lack of them, this investment is a welcome shot in the arm, far from meaning diddly squat. I understand that for a regular share in a regular context, but not this time.

[Corporate]

I started to look at DIL, but, decided to hold off investing until their is a clearer picture of financial performance.

In the mean time I have taken the information we do have; 'net new customers, and looked at the trend. I don't think it is a coincidence that customer growth started to decline when the accounting fiasco emerged.


4915

[winner69]

I started to look at DIL, but, decided to hold off investing until their is a clearer picture of financial performance.

In the mean time I have taken the information we do have; 'net new customers, and looked at the trend. I don't think it is a coincidence that customer growth started to decline when the accounting fiasco emerged.


4915

Meaning what?

Surely they can count to 120 correctly?

[Corporate]

Meaning what?

Surely they can count to 120 correctly?

Meaning, I'm sure the reputation damage can't be helping new sales.

I don't have an issue with the net new customer number.

[CJ]

Meaning, I'm sure the reputation damage can't be helping new sales.

I don't have an issue with the net new customer number.I agree there may be a bit of that. There may be some conservative businesses holding back to make sure DIL will be saying around. If true, it could make for a nice pop once things get sorted.

They need to get it sorted by Christmas, hit the ground running with sales and list in the US mid in Q3 next year in my view. Conservative US companies will also like it being US listed.

[Baddarcy]

PS I dont really care if ACC are buying or selling I will back myself over their decesions

I always find it a little reassuring that someone else has the same point of view as me thou, its always a bit of a worry when you're buying and the "big" fellas are selling :-)

Speaking of "big" guys, looks like a few off market trades going through today.

[blackcap]

I always find it a little reassuring that someone else has the same point of view as me thou, its always a bit of a worry when you're buying and the "big" fellas are selling :-)

Speaking of "big" guys, looks like a few off market trades going through today.

Baddarcy, I suggest you read Lynch's "One up on Wall Street"! When the big fellas are selling... it really isnt a worry and vice versa as well. They really do not know any more than you and are often "in the dark" as well. They get it wrong and right as often as you do, but you have an advantage that you are not constrained by aiming for mediocrity. Cheers.

[blackcap]

DIL
17/10/2013 12:46
GENERAL

REL: 1246 HRS Diligent Board Member Services INC (NS)

GENERAL: DIL: Diligent Board Member Services - Update on Timing

October 17, 2013

Diligent Board Member Services, Inc.
Update on timing for release of Restated Financial Statements and the
Preliminary Half Year Announcement

On August 6, 2013, Diligent Board Member Services, Inc. (the "Diligent")
announced that it would restate its financial statements for the fiscal years
ended December 31, 2010, 2011 and 2012 and the fiscal quarter ended March 31,
2013, and that its previously reported results for such fiscal periods and
interim periods within such fiscal years should no longer be relied upon.

NZX had previously advised Diligent that while it would not grant a waiver
from the applicable rules requiring Diligent's preliminary half year
announcement and half year report to be released in August and September,
respectively, it would take no action if Diligent would provide its
preliminary half year announcement by 28 October and its half year report by
29 December. At this time, Diligent has determined that it will not be able
to provide its preliminary half year announcement by 28 October 2013.
Diligent cannot finalise its preliminary half year announcement and half year
report for 2013 until the restatement process is complete. It is now
expected that this process will take up to an additional 45 days. This means
that Diligent's preliminary half year announcement is expected to be provided
on or before 12 December 2013. NZX has indicated it does not intend to
suspend trading in Diligent's shares because of this additional delay to the
provision of Diligent's preliminary half year announcement.

To date, no new material adverse revenue recognition issues have been
discovered during the restatement process. However, the restatement process
is very complex and time consuming and involves reviewing the recognition of
revenue for approximately 20,000 transactions over the period covered by the
restatement. As previously announced, the revenue recognition errors
identified by the Company do not affect the total revenues ultimately earned
or to be earned, or the amount or timing of cash received or to be received
from individual customer agreements.

Diligent remains focused on completing the restatement process and announcing
its restated financial statements and the preliminary half year announcement
as soon as possible. Diligent is working with its new US independent
registered public accounting firm, Deloitte & Touche LLP to complete the
reaudit of its historical financial statements and has also engaged
additional external resources to assist with completing the restatement
process. Alessandro Sodi, Diligent's President & Chief Executive Officer
said "completing the restatement quickly is one of the highest priorities in
the Company and the Board and management team are focused on the completion
of both the restatement and reaudit."

Forward Looking Statements

This document contains forward looking statements within the meaning of the
safe harbor provision of the Securities Litigation Reform Act of 1995. Terms
such as "expect," "believe," "continue," and "intend," as well as similar
comments, are forward looking in nature. These forward looking statements
include statements regarding the Company's intent to restate certain prior
period financial statements and the errors that resulted in the Audit
Committee reaching the decision that these historical financial statements
could no longer be relied upon. There can be no assurance that the Company's
Board of Directors, Audit Committee, management or independent registered
public accounting firm will not identify additional issues in connection with
the restatement or reaudit, or that these issues will not require additional
corrections to the Company's prior period financial statements. These
statements are subject to risks and uncertainties, including the risk that
additional information may become available in preparing and reauditing the
financial statements and may require the Company to make additional
corrections, the time and effort required to complete the restatement of the
financial statements, actions which may be taken by the NZX in respect of the
Company's continued listing, the ramifications of the Company's potential
inability to timely file periodic and other reports with the US Securities
and Exchange Commission, and the risk of litigation or governmental
investigations or proceedings relating to these matters. In addition, as
disclosed in our prior filings, our Special Committee investigation
identified a number of instances in which we were not, or may not have been,
in compliance with applicable New Zealand and US regulatory obligations and
such instances may expose us to potential regulatory actions and/or
contingent liabilities; certain of our past stock issuances and stock option
grants may expose us to potential contingent liabilities, including potential
rescission rights; we are subject to New Zealand Stock Exchange Listing Rules
and compliance with securities and financial reporting laws and regulations
in the US and New Zealand and face higher costs and compliance risks than a
typical US public company due to the need to comply with these dual
regulatory regimes; as of December 31, 2012 we identified material weaknesses
in our internal control over financial reporting and concluded that our
disclosure controls were not effective; we must address the material
weaknesses in our internal controls, which otherwise may impede our ability
to produce timely and accurate financial statements; our business is highly
competitive and we face the risk of declining customer renewals or upgrades;
and we may fail to manage our growth effectively. Please refer to Diligent's
Annual Report on Form 10K for the Fiscal Year ended December 31, 2012 filed
with the Securities and Exchange Commission for further information.

Investor inquiries:
Sonya Joyce
Phone: +64 4 894 6912

Media inquiries:
Geoff Senescall
Phone: +64 21 481 234
End CA:00242504 For:DIL Type:GENERAL Time:2013-10-17 12:46:05

[Baddarcy]

Are we in some sort of temp trading halt?

[bull....]

thought it was quite positive

[Dilbert]

Yes, again, I don't see a need for undue negativity.

"As previously announced, the revenue recognition errors
identified by the Company do not affect the total revenues ultimately earned
or to be earned, or the amount or timing of cash received or to be received
from individual customer agreements."

[Rastas]

or more importantly....

"To date, no new material adverse revenue recognition issues have been discovered during the restatement process."

[hilskin]

That might just be the last straw for some holders. They might say everything is ok but who has the balls to wait and find out and god knows when that will be. Know what I would be doing.

[bull....]

or more importantly....

"To date, no new material adverse revenue recognition issues have been discovered during the restatement process."

nothing like an update to perhaps alay fears

[Whipmoney]

That might just be the last straw for some holders. They might say everything is ok but who has the balls to wait and find out and god knows when that will be. Know what I would be doing.

It's just a revenue timing thing.. has no bearing on the client user agreements and cash collected. Cash-flow looks good.

[MAC]

No one likes a six week delay in results and many would all like to see the numbers, but if there are both no new material adverse revenue recognition issues, and DIL to not expect the total revenues ultimately earned or to be earned, or the amount or timing of cash received or to be received from individual customer agreements to be affected, then this is effectively a neutral outcome.

Thus we should anticipate HY13 results to very close to what was expected prior to the 6th August 2013 delay announcement.

Just goes to show what an enormous storm in a tea cup all of this has been.

[etrader]

All good they are just taking prudent steps to make sure all past reporting is accurate.

I like DIL retention rate of clients very high and growing still.

[okay]

or more importantly....

"To date, no new material adverse revenue recognition issues have been discovered during the restatement process."

Problem is "to date" tells you nothing about where they are up to? Still making their way through 2010, 2011, 2012? Who knows?
My initial reaction on reading this was a muted "this is becoming a bit of a joke really". But it doesn't totally surprise me, they do need to get their accounting/admin processes fully sorted out.

[iceman]

It's just a revenue timing thing.. has no bearing on the client user agreements and cash collected. Cash-flow looks good.

Yes but I wonder how much the many months of this work is going to cost and which of course will create some serious one-off (hopefully) costs. But I can only read this statement to suggest that there will be no material change to the company's previous, present or future income. Or like MAC says, probably a very big storm in a teacup with regards to operation but of course with very serious negative changes to market sentiment.

[Whipmoney]

Yes but I wonder how much the many months of this work is going to cost and which of course will create some serious one-off (hopefully) costs. But I can only read this statement to suggest that there will be no material change to the company's previous, present or future income. Or like MAC says, probably a very big storm in a teacup with regards to operation but of course with very serious negative changes to market sentiment.

Oh i'm sure that there will be a significant bill but the upside is that they will have a better financial reporting system in place and therefore this issue hopefully shouldn't rear its ugly head again.

Personally I agree with MAC, this really does seem like a giant storm in a tea-cup. From their earlier disclosures it seems that the whole issue boiled down the timing of revenue recognition. From memory DIL were booking revenue on a contract from the the start of the month it was secured in, as opposed to pro-rating it on a day to day basis (i.e. recognising revenue from say the 15th if say the contract begins then).

As other commentators on the forum suggested, the worst case scenario would be that every contract was signed on the last day of the month and booked on the 1st, meaning they were overstating revenue by at most, one month per year (i.e 1/12 = 8.33%). This would be highly improbable and the law of averages would suggest that revenue was probably overstated by around 15 days a year (4.10%) as some contracts are signed early in the month and others later.

So even if revenue is downgraded, then deferred revenue will increase (be stretched out) and I imagine any matched expenses will have to be deferred to later months to reflect accrual accounting. As you can see this really is a huge process for very little benefit from an accounting perspective (i.e. the truth and fairness of the accounts). Personally I've been looking at the underlying cash-flow of the business and it looks good and therefore I don't see why one would get so hung up on the P&L (accounting income) etc when its the cash-flow which matters.

[iceman]

As you can see this really is a huge process for very little benefit from an accounting perspective (i.e. the truth and fairness of the accounts). Personally I've been looking at the underlying cash-flow of the business and it looks good and therefore I don't see why one would get so hung up on the P&L (accounting income) etc when its the cash-flow which matters.

I agree Whipmoney and am quite relaxed about all of it as my investment in DIL has a very long term focus. Luckily I was on a beach in Samoa, with the laptop turned off for the last week, so missed all the agonising that obviously has gone on as evidenced by reading the last few pages on this thread. All interesting reading by the way !

[winner69]

?... when its the cash-flow which matters.

Correct whip money .....only 3 numbers matter ..... New clients, retention and reported (even though not official yet) ......I think we can rely n that

Now can you explain to me why the last 3 quarters (Q1 Q2 Q3) cash flow is about the same as last year even though we have seen a high retention rate and new customers and improving margins and even the touted debtor collection. I would have thought a high growth company would have seen annual cash flows growing YoY as well.

Nobody else has answered yet ....maybe you can ....puzzle to me

[CJ]

Nobody else has answered yet ....maybe you can ....puzzle to meI haven't looked into this recently but extra R&D costs, additional sales staff and extra costs to sort the stock option/revenue recognition issues.

[Lorne Ranger]

Hello,
Is there anybody in there?
Just nod if you can hear me
Is there anyone home?

Come on
Now
I hear you're feeling down
I can ease your pain
Get you on your feet again

Relax
I'll need some information first
Just the basic facts
Can you show me where it hurts?

There is no pain you are receding
A distant ship's smoke on the horizon
You are only coming through in waves
Your lips move
But I can't hear what you're saying

When I was a child I had a fever
My hands felt just like
Two balloons
Now I've got that feeling once again
I can't explain
You would not understand
This is not how I am

I... Have become comfortably numb

O.K.
Just a little pin prick
There'll be no more aaaaaaaah!
But you may feel a little sick

Can you stand up?
I do believe it's working
Good
That'll keep you going through the show
Come on
It's time to go

There is no pain you are receding
A distant ship's smoke on the horizon
You are only coming through in waves
Your lips move
But I can't hear what you're saying

When I was a child
I caught a fleeting glimpse
Out of the corner of my eye

I turned to look but it was gone
I cannot put my finger on it now
The child is grown
The dream is gone
I... Have become comfortably numb

[bonne vie]

Lorne Ranger- great post - come join the party on PEB. Some of us Diligent holders and ex like Moosie enjoying some light relief.

[Lorne Ranger]

Lorne Ranger- great post - come join the party on PEB. Some of us Diligent holders and ex like Moosie enjoying some light relief.

Thanks for the invite, sounds like a party. Ive been standing in the corner with PEB shares since January ; ) Im over here behind the rubber plant.

Nice to have some lighter times, if it holds today, and no reason why it shouldnt, could be a real party to be had this weekend!

[Lorne Ranger]

PS disclaimer: Three main sharesholdings XRO, DIL, PEB. (guess which one I'm not talking to right now?!)

I know some will scream DIVERSIFICATION which is valid, and we have that in other assets, but its hard to sell any of them right now (for different reasons!) and buy into AIA etc. But thinking about being more assertive in trading for a spell. Cant do much worse than lose 25% of a major holding in two days.

[pierre]

I contacted Sonya Joyce (Investor contact) at Diligent on Tuesday regarding the delay in updating the market about progress with the results of the financial review. My email was followed by yesterday's announcement.

A subsequent message from Sonya advised:

"What is actually taking the time, is manually going through every single transaction over that period. When we initially sign a client, that is one transaction, but as you know, we have had great success with upgrades – so every time a client asks to add a another user, cancel a user, that is another transaction and as people come and go at companies, this can happen a lot. So it takes a lot of time to do this.

Outside of the progress with the restatement, we are actually providing as much information as we can. Any financials we provide must be provided in accordance with US GAAP or reconcilable to US GAAP, with the current restatement process, it makes it impossible to provide any financials other than Cash as it would breach US SEC obligations."

I emailed Sonya again today with the following comments:

"I was concerned to note that up to a further 45 days is required to complete the restatement process. I would expect that a logical process is being followed and that transactions for the 2010 fiscal year are being reviewed first, then 2011 and so on. The company’s 17 October announcement stated that no material adverse impacts have been discovered, so would it not be possible for an announcement to be made once the review of the 2010 year is completed. This could then be followed by announcements for each of the subsequent periods as their reviews are finalised?

This process would assist shareholders and the market by comparing the review outcomes with previously published results for each year and enable a reasonable assessment to be made of the likely overall impact of the review."

Sonya has undertaken to discuss the above suggestion with the CFO. I'll keep you posted with the response.

[MAC]

Thank you Pierre for both making the effort and for sharing, appreciated.

[CJ]

I find this very, very concerning and I don't believe we're getting the full story. DIL products should be auditing who comes and goes and should be maintaining a fully auditable log of these activities for many years. (This is required for various compliance regimes around the world.) From these logs it should be a pretty simple bit of SQL to establish who is in and out. If reconciling those logs with billed accounts and cash transactions is where the issue is it makes me very concerned that DIL internal business processes are sub-standard.The Auditors are probably making them go back to the source document (paper copy) to verify the date for each rather than rely on the date in the computer (which they may have just defaulted to the start of the month).

[Lorne Ranger]

Thanks Pierre.

Personally I DO find it comforting to even read that a Dil senior has spoken about this, outside of an official release, and given a little insight, and a little sense that yes it is urgent. I think this feeling says more about a previous total lack of comms than anything else. So thanks again Pierre, I can head into the lovely weekend a little more becalmed. Cheers

[iceman]

I too thank you for sharing this Pierre. Have a good weekend all.

[Lorne Ranger]

Hard to be thrilled with a fortnight like that one, blimey. But certainly some encouraging signs this week and enough to support a sense of it being oversold. A bit more communication from DIL, no further bad news please, and taking some shelter in Xero's slipstream and things may look a fraction more rosey by end of the week. Here's hoping. (yes, hope IS a strategy). Have a good weekend, Im not going to check this again until Monday!

[Baddarcy]

Thanks pierre ...



(The above is the same as the recent announcement.)

I find this very, very concerning and I don't believe we're getting the full story. DIL products should be auditing who comes and goes and should be maintaining a fully audit able log of these activities for many years. (This is required for various compliance regimes around the world.) From these logs it should be a pretty simple bit of SQL to establish who is in and out. If reconciling those logs with billed accounts and cash transactions is where the issue is it makes me very concerned that DIL internal business processes are sub-standard.

Any accountants out there care to comment?

I'm not an accountant but i did work for an Australian based SaaS company that had operations & clients all over the world.

While we didn't experience what DIL is experiencing now, our software licencing system was completely separate from our Accounting System. So while the licencing system recorded On and Off's as they occurred the invoice was only prepared monthly and it contained only a summary of changes at month end.

Sometimes they got out of synch and had to be manually reconciled (usually because clients had reallocated licences and not informed us), this was a time consuming manual process and a complete pain in the butt.

Because of the time this is taking DIL, I suspect DIL is in a similar position of not having integrated systems, and thus are having to reconcile the entire client base transactions between licences and the accounting package.

[Balance]

The Auditors are probably making them go back to the source document (paper copy) to verify the date for each rather than rely on the date in the computer (which they may have just defaulted to the start of the month).

It's all about chargeable hours.

That is the cold hard reality of auditors, lawyers and accountants these days.

Why do a job in 50 hours when you can stretch it out to 1000 hours?

[artemis]

It's all about chargeable hours. That is the cold hard reality of auditors, lawyers and accountants these days. Why do a job in 50 hours when you can stretch it out to 1000 hours?

I do partly agree, but a good deal of responsibility for hours / scope creep must rest with the client. If the client is not closely managing the scope, process and outcomes then they deserve what they get. Professionals such as you mention often propose and implement a 120% solution, which is partly butt covering. Which is fair enough, but if the client just accepts such a proposal without detailed questioning and risk assessment they have nobody to blame but themselves.

[Balance]

I do partly agree, but a good deal of responsibility for hours / scope creep must rest with the client. If the client is not closely managing the scope, process and outcomes then they deserve what they get. Professionals such as you mention often propose and implement a 120% solution, which is partly butt covering. Which is fair enough, but if the client just accepts such a proposal without detailed questioning and risk assessment they have nobody to blame but themselves.

DIL has too much to lose with the governance and accounting issues surfaced this year - it is about abundance of caution, and yes DIL is responsible.

But I believe the auditors and lawyers are milking this one.

[peat]

Why do a job in 50 hours when you can stretch it out to 1000 hours?

Because you will lose the customer ? And that may mean you don't get other customers.
But principally of course simply because its the wrong thing to do and unprofessional.

[artemis]

Because you will lose the customer ? And that may mean you don't get other customers.
But principally of course simply because its the wrong thing to do and unprofessional.

Thing is, the big firms have a very convincing story. Based on a large volume of supporting data and anecdotes (scare stories). For busy leaders it is very tempting to take the word of the experts and just get out the chequebook. I am not saying the accountants etc are wrong though. They may well be 100% justified. I am saying that the company hiring them has a big responsibility to assess risks and rewards in that as well as every other aspect of their business.

[edm]

Thanks for that update!

Ed.


GS research out today. Target price of $5.50. Very conservative assumptions in my opinion.

[goldfish]

Whats with the damn bot doing some real damage as we trying ti recover

[Xerof]

Should have got out on the rally :)

you know moosie, with this particular stock in mind, you should act on your own advice instead of dishing it out to all and sundry :sleep:

[muss1]

I did act on my own advice last week and don't regret it one bit.

But yes, one wet bus ticket slap to the face. Back to my hovel now :)

I'm not 100% sure you did act on your own advice.. You like the long term prospects, but sold out near the current support?

Everyone is allowed their opinion, but you're now commenting emotionally willing the price down to justify your decision.

[goldfish]

Good old small lot selling. Should have got out on the rally :)
Shoulda coulda didnt...looks like its recovered a bit though now. Still up lots since i bought other day so happy enough.

[muss1]

That's fine - I don't necessarily agree, but it's your decision and I'm not trying to say you should change it. You've already booked a gain on your short term trade? Well done.

I just think your comments are now bagging DIL which is a bit unfair especially based on what you just explained

[muss1]

I'm not worried about what I take from them, I worried about the person that is passing by trying to learn something.

Your comments are short term/trader based - yet you aren't backing them up with your own capital?

I'm sorry if it sounds like I'm having a go - it's not my intention - I just want to clarify your position for everyone

[CJ]

I'm not worried about what I take from them, I worried about the person that is passing by trying to learn something.

Your comments are short term/trader based - yet you aren't backing them up with your own capital?

I'm sorry if it sounds like I'm having a go - it's not my intention - I just want to clarify your position for everyonei think you need to read more threads. He bought DIL as his first long term hold after being a trader. He got bored, sold at a reasonable lose but timed perfectly to make short term trades on XRO and PEB. How often do two shares make reasonably safe 50%+ gains in a week.

He's now waiting for DIL to enter a confirmed uptrend before buying back in. - that needs certainty over the financial results.

That about right Moosie?

[muss1]

i think you need to read more threads. He bought DIL as his first long term hold after being a trader. He got bored, sold at a reasonable lose but timed perfectly to make short term trades on XRO and PEB. How often do two shares make reasonably safe 50%+ gains in a week.

He's now waiting for DIL to enter a confirmed uptrend before buying back in. - that needs certainty over the financial results.

That about right Moosie?

Yep fair, as I said I just want to clear up his position - shouldn't have to read other threads to understand why he has a a certain opinion. As I said I'm not trying to have a go - sounds like it's been a very successful decision - congrats moosie

[pierre]

Hi all

I said that I'd post again when I received a reply from Diligent to my suggestion that they might consider announcing the results of the audit of each year as it is completed.

The answer received today is:

"Just coming back to you on your suggestion. It won’t be possible to provide year by year as we are auditing and restating revenue for all years at the same time."

Looks like we'll all have to be patient until the whole job is completed and wait for the big announcement currently forecast to be made in early December.

Hold on I reckon - I don't think there's any need to panic.

[iceman]

Hi all

I said that I'd post again when I received a reply from Diligent to my suggestion that they might consider announcing the results of the audit of each year as it is completed.

The answer received today is:

"Just coming back to you on your suggestion. It won’t be possible to provide year by year as we are auditing and restating revenue for all years at the same time."

Looks like we'll all have to be patient until the whole job is completed and wait for the big announcement currently forecast to be made in early December.

Hold on I reckon - I don't think there's any need to panic.

Thanks again Pierre. Annoying as the delay is, I agree there is no need for panic and all will be revealed in December. Meanwhile I hope they can focus on running the business well.

[Balance]

Thanks again Pierre. Annoying as the delay is, I agree there is no need for panic and all will be revealed in December. Meanwhile I hope they can focus on running the business well.

Basic accounting tells us that cash is the ultimate residue of all accounting entries. DIL is piling up cash so there's minimal danger of the accounting restatements resulting in a massive loss of profitability - it's a timing issue. I fail to understand the use of the word 'panic' in DIL's context.

Word from the wise man himself :

‘For some reason, people take their cues from price action rather than from values. What doesn’t work is when you start doing things that you don’t understand or because they worked last week for somebody else. The dumbest reason in the world to buy a stock is because it’s going up.’

[winner69]

anyone have a forecast for new client numbers in the next quarterly? I'm taking a guess around 95 on the current trend and with the re-audit ongoing...

Moosie .... surely not as low as 95 .... that's even worse than the Sept quarter number

Methinks you downramping again .... others might have another explanation

[Balance]

based on current trends, how could you not get a lower number? that's a guess, not a downramp, and I'm asking for others opinions.

now I know what its like to be in the unfavoured camp...

Moosie - it is not kosher to trade in and out of a stock, waxing lyrical after you bought in and then, mouthing concerns and risks after you sold out. You can understand why many would see you as in effect ramping up and ramping down with your comments.

Those who trade short term tend to use TA and charts.

Take this in the spirit it is written in - so you are aware of the perception.

[edm]

Good morning Moosie,

I think even if you were to be optimistic and say 175, you'd get dumped for being overly sarcastic...
This share has taken quite a beating in the last couple of weeks not many posters on this thread has recovered...

Have a great day.

Ed.


based on current trends, how could you not get a lower number? that's a guess, not a downramp, and I'm asking for others opinions.

now I know what its like to be in the unfavoured camp...

[muss1]

Good morning Moosie,

I think even if you were to be optimistic and say 175, you'd get dumped for being overly sarcastic...
This share has taken quite a beating in the last couple of weeks not many posters on this thread has recovered...

Have a great day.

Ed.

The fact the SP has taken a beating is inconsequential to the performance of the company. Those "posters that haven't recovered" are also those posters that have a long term view and current SP does not matter. I agree that some people have concerns about the future growth and have sold out - no worries, that's a different kettle of fish.

The great man also said if you can't watch the SP drop by 50% without getting emotional then you shouldn't be in the market.

Obviously all this assumes the future is still bright - and not everyone agrees on that that's for sure

[psychic]

anyone have a forecast for new client numbers in the next quarterly? I'm taking a guess around 95 on the current trend and with the re-audit ongoing...

122 new q3 c/f 168 q2 due to slightly lower sales July and Aug. So sept ok.
Oct - Dec? How do you figure 95 Moosie?

[Balance]

I was happy to make a quick decesion to sell after the last announcement, that was purely based on what I believed would be market sentiment toward a slowing client growth.

However I did not exspect to pick shares up so quickly for 20% less than I had sold.

2 days after selling I bought back in based on the thoery that yes sales are slowing but (even if moosie is correct and they slow even more) they are still growing at a good pace(more than most companies).
Who really care's moosie if what you post could be preceived to be ramping a stock.
This world is full of people who are pc and wont speak up for fear of being chopped down, say what you think, just be ready to get a few hypocrites comment because you are not conforming.
The above suggestions are not reccommended to be used on your wife lol

There is a world of difference between being PC, and perception of ramping a stock up and down after buying in or selling out.

That's exactly what Moosie has been doing so those who question his motives are equally in the right and well within their rights to voice their concerns.

"Watch your thoughts; they become words. Watch your words; they become actions. Watch your actions; they become habit. Watch your habits; they become character. Watch your character; it becomes your destiny." Old saying

[Balance]

Down 16.5% (33 clients) in second quarter (201/168).

Down 28% (46 clients) last quarter (122/168).

Now let's say down another 27 new clients (down 23%). And that's being conservative if the trend is anything to go by. Get where I'm going now?

I sold out because growth is slowing and I realised, after looking at XRO, that growth is king in SaaS. I love the fact that DIL is a profit turning company with growing margins and high retention rate, but the market dictates shareprice, not me (silly of you who think I can ramp/dampen the SP by myself!), so I am out until we see a turnaround.

Recording this for posterity!

[Radler]

Looks like DIL may leap above $5 for opening

[edm]

Hi Radler,

Yes it has!

I don't know if I should hold / let go...

Anyone offering any opinions? ;)

Ed


Looks like DIL may leap above $5 for opening

[Lorne Ranger]

Hi Radler,

Yes it has!

I don't know if I should hold / let go...

Anyone offering any opinions? ;)

Ed

Ha! If we knew that we would be rich already. Hard to call. Nothing changed since the collapse, (although some would argue that is change for the better in itself!). Heavy rise since then so about due for a correction for profit taking from traders (not Moosie I assume) but it had a little flex down yesterday and didnt seem to scare the traders out as expected.

So... no. I think this stock will continue to recover some until the announcements. Restatement will have a positive effect as it creates some certainty, although probably not much as most of it, if not all, will have been anticipated already. Q4 figures will have more of an impact.

Note carefully chosen words to avoid ramping, damping, or cramping my style. Naughty Moose!;)

[Hoop]

Hi Radler,

Yes it has!

I don't know if I should hold / let go...

Anyone offering any opinions? ;)

Ed

Never sell an uptrending stock.....wait for sell signals

[winner69]

Hi Radler,

Yes it has!

I don't know if I should hold / let go...

Anyone offering any opinions? ;)

Ed


Be led by the moose I reckon

[winner69]

Down 16.5% (33 clients) in second quarter (201/168).

Down 28% (46 clients) last quarter (122/168).

Now let's say down another 27 new clients (down 23%). And that's being conservative if the trend is anything to go by. Get where I'm going now?

I sold out because growth is slowing and I realised, after looking at XRO, that growth is king in SaaS. I love the fact that DIL is a profit turning company with growing margins and high retention rate, but the market dictates shareprice, not me (silly of you who think I can ramp/dampen the SP by myself!), so I am out until we see a turnaround.

So in a years time hardly any new customers?

[goldfish]

Never sell an uptrending stock.....wait for sell signals
What would be you sell signals for this rise? Im finding it tricky to predict

[Xerof]

What would be you sell signals for this rise? Im finding it tricky to predict

moosie buying.........




sori moose, couldn't resist

[edm]

Thanks Hoop


Never sell an uptrending stock.....wait for sell signals

[winner69]

moosie buying.........




sori moose, couldn't resist

Well moose selling was a good buy signal

Was it 430 odd he sold at?

Yes Xerof it would be a bad sign if moosie bought in to DIL ....ESP if it was because of a change in strategy again and reverting to mum and dad like hold em type of investor

[muss1]

New product and/or rest of world catching on. A few have overlooked the potential of this. If the rest of the world (if) hits the rapid growth phase we will see a kick without worrying about the second product. Did the month of September indicate this was starting in their last cryptic update? Maybe...

[muss1]

One swallow does not a summer make. Sample size?

[Mobius]

The US market for Boardbooks isn't close to saturation, and there's markets within the US which have barely even had the surface scratched. DIL have concentrated for a long time on catching the big fish, (Fortune 500) but now that many of the big fish have been hooked, and landed, attention turns to smaller fish, and different fish.

Smaller fish are easier to land, too. :)

[winner69]

Did the 'pros' came out this afternoon?

[PlatnuM195]

The US market for Boardbooks isn't close to saturation, and there's markets within the US which have barely even had the surface scratched. DIL have concentrated for a long time on catching the big fish, (Fortune 500) but now that many of the big fish have been hooked, and landed, attention turns to smaller fish, and different fish.

Smaller fish are easier to land, too. :)

Never thought the US market was saturated and I don't see why anyone prior would think that. Unless they assumed Fortune 500 companies are the only potential customers.

[Baddarcy]

The dead cat bounce ... should run out of momentum soon ... Stops tightening.

credit where credit is due...you called it :-)

[Xerof]

Gone. Thanks for all the fish.

you must have also turned out the lights Belg, there's nobody here :p

[Lorne Ranger]

(ahem)...HELLO....

[Lorne Ranger]

............HELLo....

[Lorne Ranger]

..........................HEllo............

[Lorne Ranger]

.............................................hello ......................

[Lorne Ranger]

Wow. Creepy.

[Joshuatree]

PSsssSt wanna buy a cheappppp antidote.?

[Lorne Ranger]

PSsssSt wanna buy a cheappppp antidote.?

oh, Hi. Antidote? Umm yeah sure I guess. Will you be my friend?

[Joshuatree]

I was told you have bad memory/amnesia/ demon tia but i your old best inferior friend TONTO! have a peyote remedy (and a cheap sportscar embedded in a roof). Kemasabe remember Great loneliness has a hi ho silver lining (plus antidote)

[Lorne Ranger]

I was told you have bad memory/amnesia/ demon tia but i your old best inferior friend TONTO! have a peyote remedy (and a cheap sportscar embedded in a roof). Kemasabe remember Great loneliness has a hi ho silver lining (plus antidote)

Jesus! Where the hell am I? (sighs). OK. well, I'll take it. I have 10,000 Dil shares. will that buy me a cactus? It least I can eat something.

[Lorne Ranger]

wow, stuff really got weird while I was gone...

*retreats to deepest darkest part of woods to visit miner*

OH! Hey!! No wait, come back! We can be nice! This? I found it, honest, Im just wearing it for fun. Umm, here, have a seat....

[Baddarcy]

Has the 'Lorne Ranger' turned into the 'Loon Ranger'????? :-)

[Lorne Ranger]

Has the 'Lorne Ranger' turned into the 'Loon Ranger'????? :-)

Lets just say holding DIL can affect ones sense of reality a little. Feeling a bit better now, switched some out to PEB for the day so breathing a little easier. Still backing DIL to come back strong, but not until restatement, so have reduced holding to try and recover some losses elsewhere.

Oh look, pretty patterns......

[Xerof]

Knock, knock

Hello, I'm looking for Elvis.....

[CJ]

Knock, knock

Hello, I'm looking for Elvis.....
Elvis who?

[Xerof]

Don't panic, nothing to say, just bringing DIL back to front page, in case it gets forgotten

CJ, I don't have a punchline.........

[janner]

Elvis who?

Elvis has left the building !!..

[blobbles]

Having re-evaluated DIL last night, my re-evaluations put the company at around the 7.20-7.80 mark on current revenue... I completely take back my 4-4.50 estimate I had before, I was using an old revenue figure on my spreadsheet.

Might buy a few of these since the restatement can't be far away and generally SP returns to fundamental valuations over time. That and a still solid, if slower, growth rate and I can see this company up around its proper $7-$8 value in the fairly near future. Any new product or a NASDAQ listing will just make this skyrocket. My only concern is management screwing the pooch on something again, which they seem to be fairly good at, particularly around financials. Still, I smell a great buy oppourtunity and might just slink in there on Tuesday... good chance to throw spare cash into something that doesn't seem so volatile at least (PEB)!

[Dilbert]

Having re-evaluated DIL last night, my re-evaluations put the company at around the 7.20-7.80 mark on current revenue... I completely take back my 4-4.50 estimate I had before, I was using an old revenue figure on my spreadsheet.



Hey blobbles, can you tell us how you arrived at those figures?

[baller18]

Having re-evaluated DIL last night, my re-evaluations put the company at around the 7.20-7.80 mark on current revenue... I completely take back my 4-4.50 estimate I had before, I was using an old revenue figure on my spreadsheet.
Might buy a few of these since the restatement can't be far away and generally SP returns to fundamental valuations over time. That and a still solid, if slower, growth rate and I can see this company up around its proper $7-$8 value in the fairly near future. Any new product or a NASDAQ listing will just make this skyrocket. My only concern is management screwing the pooch on something again, which they seem to be fairly good at, particularly around financials. Still, I smell a great buy oppourtunity and might just slink in there on Tuesday... good chance to throw spare cash into something that doesn't seem so volatile at least (PEB)!
PEB is volatile and Dil is not?

[blobbles]

Hey blobbles, can you tell us how you arrived at those figures?


I could, but that would be giving away my secrets :)

I won't currently be sharing my spreadsheet for this because, until restatement and half year reports are out, there are too many unknowns. But I am assuming a P/E of 30ish and I look forward based on growth rates by 1-3 years to get the what the share price should be at these times based on fundamentals. Basically, my figures tell me that right now the price is where it should be if you believe there will be zero growth next year (which I think it silly!).

But DYOR and figure it all out for yourself. The company and quarterly reports are all out there on their site and at NZX, use them wisely! I think once the restatement comes out, the SP should shoot up again to its proper valuation, provided the company doesn't torpedo itself with another financial screw-up and the restatement doesn't show that they have been moving decimal points willy nilly! Do remember that they are also sitting on a pile-o-cash, which hopefully they will surprise us all with and announce a special "we screwed it up and are sorry" dividend of 30c at the end of the year - I can only dream! :)

[blobbles]

PEB is volatile and Dil is not?

DIL has sales and growth rates to base intelligent forward looking assumptions on. They also have similarities to PEB in that they have a great product with a pretty large barrier to entry.

PEB has no reported sales in its target market and no growth rates to base anything on. It has a ship load of potential but it also has barriers to sales in terms of political manoeuvring by competitors and instilled conservatism from doctors (and rightly so). PEB still has not proved that it has won over either or both of these. People currently believe that sales will flow naturally, but I think this will take longer than anticipated by some who have already built in 7% US market share into PEBs SP, with zero sales! Despite all this, I still love their chances long term so hold quite a few of them, as a long termer! But putting more money into them at over inflated levels doesn't make sense to me, but putting money into an undervalued company does :)

[robbo24]

I am still a fan of DIL. I like the prospects of the company. I deal with a lot of organizations. It is clear to me that the type of service they provide is greatly needed, but board members are so often technologically inept so DIL's specific flavour of customer support is crucial to success.

DIL management (and shareholders!) are not stupid - we all know SAAS companies have to expand to survive. I look forward to different iterations and compatibility additions in the future.

[janner]

good chance to throw spare cash into something that doesn't seem so volatile at least (PEB)!

" Volatile " Also used to be known as some thing capable of taking FLIGHT..

Which can be taken in many ways.. :-))