Diligent Boardbooks IPO

[goldfish]

lol, it was my problem only a year back as well. The market taught me that good things come to those who wait, and that you make a lot more money being a slothful investor than a trade-everyday investor (as long as the company you invested in is doing well!). DIL is a long-term hold and watch the money pile up stock. It's growth story is about to continue and the positive potentials far outweigh any negatives, it just the market its sweet time to realise this, unlike with XRO. Be patient goldfish, be patient!

Wise words from a wise moose. Will try but i can promise anything.

[MAC]

Has anyone access to market research or opinion on ICSA's BoardPad2 product as forward competition to DIL.

They do seem to be accumulating some of the larger corporates now, HSBC, Virgin, etc ?

http://www.icsasoftware.com/boardpad/boardbooks/?gclid=COvgkIa6lbgCFQpgpQod3BEAWQ
http://www.icsasoftware.com/clients/new_clients.asp

[MAC]

They have standing clients too: http://www.icsasoftware.com/clients/index.asp

Certainly there is something to be said for DIL being first in the market and the market leader, and of course they have a 97% retention rate.

It maybe these guys will get to nibble around the edges, who knows they may be just enough competition to keep DIL innovative and progressing.

[Amor Fati]

Most of the ICSA clients are using Blueprint 2000 Company Secretary System for data compliance input not the Blueprint Boardpad2, ICSA also have Blueprint OnBoard, both platforms do the same thing pretty much, odd?

ICSA is quite tekkie, most directors want easy and simple as it is hard enough just wading your way through all those documents.

ICSA is 24/6?

Looks like Virgin Media has jumped iPads, from ICSA to Diligent?

http://www.icsasoftware.com/clients/index.asp?dispWho=virginmedia&PagePosition=8
http://www.boardbooks.com/overview-clients/

Feel free to correct me if I have it wrong.

DIL - Holding

[Banksie]

ICSA is quite tekkie, most directors want easy and simple as it is hard enough just wading your way through all those documents.

Welcome to the forum Amor Fati and thanks or the information.

Audience targeting it what can make or break a product like this. No matter how much sense it makes from an IT perspective if the users (who happen to be the most powerful people in the organisation) don't like it, it will never succeed.

[Monty]

Is this similar to the Beta vs VHS or Microsoft vs Lotus vs apple battles of the past?
Lets hope the diligent vs ICSA battle is one sided.

[Banksie]

The University of Newcastle (Australia) did an evaluation of BoardBooks vs BoardPad 2.

http://auc.edu.au/media/xw12/xw12-slides-rhodes.pdf

BoardPad 2 won out in the end because it was cheaper and better matched Corporate Governance expectations.

An interesting quote from the article is:

"BoardPad 2 wasn’t the preferred option for IT due to the user interface "

[MAC]

Thanks for that Banksie, it's an interesting case for a couple of reasons.

It's outside DIL's initial target market of corporate clients, but, more interestingly it suggests an active market for universities and government organisations. Perhaps this is where DIL's second product will be better tailored, if we ever see it released ?

[CJ]

The University of Newcastle (Australia) did an evaluation of BoardBooks vs BoardPad 2.[/I]Thats pretty funny. They effectively locked down the iPads so they couldn't be used for anything else from what I can tell. Easier to downgrade the iPad that upskill the user - not a positive outcome from a University!!!

[ddrone]

XRO screams ahead and DIL wanders up and down. Seems the two aren't that linked afterall.

[Banksie]

Another link to a buying guide comparing products for hospital governing board portals.

site: http://www.greatboards.org/
report: www.greatboards.org/pubs/Board-Portal-Buying-Guide-final.pdf

Another potential market I hadn't thought about.

[CJ]

Another potential market I hadn't thought about.There are lots of markets for Boardbooks. Schools, hospitals, councils, governments, companies, charities - pretty much every organisation of a sufficient size has some form of board or oversight committee.

The issue as both of those reviews point out is cost. DIL has gone top shelf and as such has attracted top shelf clients. Will this limit its growth or does the premium it can command make this strategy worthwhile.

Since everyone likes to compare DIL and XRO, XRO has gone the opposite strategy - target the SMB market with a low cost product (average revenue of $3-$400 per year) compared to the likes of SAP where you get no change from $1m to implement into an organisation.

[MAC]

Yes, let's hope DIL do release a product soon, I'm kind of sensing lately that the opportunity to be the market leader in the bureaucratic sector may soon be passing them by.

[MAC]

Totally agree, they have the market reputation to draw on and a sales force in place all good to go, .... , we just yet need a little more patience.

Disc: Holding

[lastmoa]

Totally agree, they have the market reputation to draw on and a sales force in place all good to go, .... , we just yet need a little more patience.

Disc: Holding

Agree also. Some people (profit takers or nervous nellies) seem to be selling. Patience here at this time ....

[GRIFFIN]

The one thing that concerns me with DIL is XROs sky high SP and if it takes a knock it may well drag DIL down with it . I know it shouldn't but investor sentiment is very powerful, but hey it may well provide a good entry point.

[TimmyTP]

Crikey I just bought at $6.68, thought I was taking the mickey at that price.

SP has bounced since, but I'm not sure whether to feel clever or dread the sudden plummet to $5.00!

Might have to take an all-afternoon lunch to force myself away from the screen!

[Banksie]

devils advocate. who says if xro gets taken down investors won't pile into DIL instead???

Cos those buying in at $17/$18 will have their cash wiped out.

[lastmoa]

In the long term the SP will follow the fundamentals which have not changed, take opportunities when they exist.

DIL is growing revenues at 70% p.a, they are improving their margins, and unlike other stocks in the sector are generating, and holding large cashflows. There is also the prospect of new and exciting products over the horizon.

Well said, Mac.

[Banksie]

the matket refuses to make sense to me when xro explodes in sp when they have same revenue and cashflow as dil but dil is sitting on a huge pile of cash, generating even more cashflow, improving margins AND making a new product, while the sp crashes! ah well, more loot in my bank account when the market wises up a bit!

I guess the difference in the 2 stocks is potential. XRO has a larger potential client base. DIL's performance really hangs on who the new product is targeted at.

[kizame]

Correct Moosie. We have an element of price irrationality with DIL. Which means those buying in at today's levels have a bit to look forward to!
Yes we have a bit of price irrationality this evening with DBroking saying the price closed at $6.85 and NZX saying No! we value it less at $6.81 so arbitrage anyone.

[TimmyTP]

ASB says $6.85 too with slightly higher vol & turnover than nzx.com, so guessing NZX is showing the wrong figures.

[janner]

The one thing that concerns me with DIL is XROs sky high SP and if it takes a knock it may well drag DIL down with it . I know it shouldn't but investor sentiment is very powerful, but hey it may well provide a good entry point.

Agree.. !!!..

[PlatnuM195]

Any speculative date for the quarterly results release?

[Jay]

15/16th July I think I read somewhere - may depend on what country you are in!

[Baddarcy]

Looking at the numbers over the last year or so, quarterly revenue has increased by $1.7m, $1.7m, $1.9m and $1.7m. So my pick is for an increase of ...wait for it... $1.7m, which would bring quarterly revenue to $13.5m or annualised to $54m.

SO while $$$ revenue increases have basically flatlined at $1.7m per quarter they have managed to keep cost inflation (deflation for the last quarter) to well below that, resulting in increasing returns.

I'm sure its bad etiquette to quote yourself.... but must be time to talk about this again... what are your expectations for next weeks report. My main point of focus is always the quarterly revenue increase. The last few quarters have been as follows:

2012 Q1 $1.71m
2012 Q2 $1.91m
2012 Q3 $1.71m
2012 Q4 $1.74m
2013 Q1 $1.57m
2013 Q2 $.........

[CJ]

I'm sure its bad etiquette to quote yourself.... but must be time to talk about this again... what are your expectations for next weeks report. My main point of focus is always the quarterly revenue increase. The last few quarters have been as follows:

2012 Q1 $1.71m
2012 Q2 $1.91m
2012 Q3 $1.71m
2012 Q4 $1.74m
2013 Q1 $1.57m
2013 Q2 $.........Would be fantastic to see something starting with a 2. Anything below $1.5 will be a worrying trend and will see the SP go done as it would signal the end of high growth. I'd like to see 1.7m+

[Baddarcy]

Would be fantastic to see something starting with a 2. Anything below $1.5 will be a worrying trend and will see the SP go done as it would signal the end of high growth. I'd like to see 1.7m+

Yes agreed, i thought revenue growth seemed to have settled at a mid point of 1.7m with fluctuations above an below, which i am happy with (actually very happy to be honest).

There are things to explain the apparent dip last quarter, NY Storms, Christmas, Feb being 3 days shorter etc etc. Can't think of many excuses for Q2 thou?

[Baddarcy]

Been a bit surprised by the lack of upwards movement because of the dollar, other stocks (FPH comes to mind) bounce all over the place because of the dollar.

4633

[Lorne Ranger]

Can I ask someone to fill me/us in on the recent change of leadership? How has the board handled the resignation? Cheers

[Lorne Ranger]

Thank you Mr Clown for your time and that explanation, it was very helpful as were the links.

Do you have an explanation for why the SP hasn't recovered in the last fortnight to go with it? ; ) Given it seems to be in "Wait and See" mode prior to QR and new product in coming week(s), I'm a little surprised at the gentle bleed. Does that show that holders are essentially uncertain about what either of those will look like? Surely the interest at $8 would flag greater confidence? It wasn't all just goodwill for Bettle surely? (Disc: Holding Dil)

(PS Fascinating reading the very first page of this thread from 2007. Wow.)

[Xerof]

Do you have an explanation for why the SP hasn't recovered in the last fortnight to go with it?

not an explanation, but an observation. Bring up a 1 year DIL chart, draw a line under the three higher lows, and extend it out. You will see price broke its long uptrend at ~$7.60.

fact of the matter is A LOT of holders who use TA as part of the toolkit would have cut and run at that point. The gap down from that level probably adds strength to this observation.

[Balance]

https://www.nzx.com/companies/DIL/announcements/238521

[robbo24]

Buy @ 666 / Sell @ 666 lol

[lastmoa]

Buy @ 666 / Sell @ 666 lol

and the first Apple sold for $666. An omen. lol

[JayRiggs]

I was a bit excited when I saw the DIL announcement this morning, because it was marked as price sensitive, so I thought it was a takeover! But when I opened it, and saw it was about delayed quarterly report, I thought ouch... DIL might be in for some weakness. Opportunity to top up?

Hopefully this will just be a short term bump and DIL carries on going upwards in the long term.
The markets can have a short term memory. When some news about US Medicare came out early this yr, FPH dropped from 2.48 to 2.30. Now FPH is 3.60 and no one cares about that piece of news now.

[JayRiggs]

hmmm open at 6.70
not too bad :):)

[Amor Fati]

Omens are fiction scare tactics!

This announcement is a continuation of the 20 July announcement.
Qtly result announcements are voluntarily.
This is not bad news, nor is it good news, it is just keeping shareholders informed of what they are doing to ensure everything is as it should be.

These issues were quite possibly always going to happen as the compliance is double edged when a US company lists on our little NZ exchange.

I hear that some other (one) company that was to list on NZX recently has decided to list elsewhere because of similar possible issues.

When Deloitte has sorted out all the issues that were missed by the previous auditors, it is full steam ahead!

What has happened will infuriate the company, this investor too quite frankly, so don't be surprised if they use some of that cash to hop exchanges soon.

Patience is a virtue, holding!

[Toasty]

Down a bit today. Moving in sympathy with Xero? May be my chance to grab a belated DIL holding which I should have done at $2.25 when I first thought of it.

[baller18]

Story and fundamentals of the company doesn't change - stick with it!!

[baller18]

Got some more at yesterdays price, didn't expect it to drop more, would've loved to load up more at today's prices... Oh well...

[forest]

Baller 18, sinds the AGM the NZX has gained 3%, DIL as present has lost about 8%. I was very positive about this company and went to the meeting considering increasing my holding. As mentioned before I was disappointed and it seems some others to, when we did not got a proper answer when the question was ask if shareholders should know anything else in relation to compliance issues. This for me was enough of an indicator that we might not know the whole story.

So I think you could be spot on about the story doesn't change, likely more unpleasant compliance issues to surface.

We do not know the amount of issues or magnitude.

And until the story does change and the company becomes totally honest and open with the share holders some of us will go to the side line.

[Mista_Trix]

Baller 18, sinds the AGM the NZX has gained 3%, DIL as present has lost about 8%. I was very positive about this company and went to the meeting considering increasing my holding. As mentioned before I was disappointed and it seems some others to, when we did not got a proper answer when the question was ask if shareholders should know anything else in relation to compliance issues. This for me was enough of an indicator that we might not know the whole story.

So I think you could be spot on about the story doesn't change, likely more unpleasant compliance issues to surface.

We do not know the amount of issues or magnitude.

And until the story does change and the company becomes totally honest and open with the share holders some of us will stay on the side line.

Did you sell out, or just not increasing until the story changes??

[forest]

Did you sell out, or just not increasing until the story changes??

I sold out and waiting for the full story to come out. I need to have full confidence in my investments. I live by the motto, If in doubt get out. And after the AGM I have doubt.

[baller18]

I sold out and waiting for the full story to come out. I need to have full confidence in my investments. I live by the motto, If in doubt get out. And after the AGM I have doubt.
I thought they replied with an acceptable answer in regards to the compliance issue? Care to elaborate please? Thanks heaps

[kizame]

Guys PLEASE look at a chart of DIL,what about that chart tells you it's buy time?
When the price first started to weaken, then break through the trend line in late June,that should have been a wake up call.
You might say the fundamentals speak for themselves,but I say a picture tells a thousand stories. Who knows how long it will retreat for,but that's the thing really,why be there while it is.

[randoman]

Baller 18, sinds the AGM the NZX has gained 3%, DIL as present has lost about 8%. I was very positive about this company and went to the meeting considering increasing my holding. As mentioned before I was disappointed and it seems some others to, when we did not got a proper answer when the question was ask if shareholders should know anything else in relation to compliance issues. This for me was enough of an indicator that we might not know the whole story.

So I think you could be spot on about the story doesn't change, likely more unpleasant compliance issues to surface.

We do not know the amount of issues or magnitude.

And until the story does change and the company becomes totally honest and open with the share holders some of us will go to the side line.

I think the answer given at the AGM was all that really could be offered at that point. They were obviously in the middle of looking into the issue, may have had some preliminary information, may have not, regardless, there is no reason to offer any information at that point in the investigation until everything is concluded and there is a definitive answer.

[Huskeez]

Guys PLEASE look at a chart of DIL,what about that chart tells you it's buy time?When the price first started to weaken, then break through the trend line in late June,that should have been a wake up call.You might say the fundamentals speak for themselves,but I say a picture tells a thousand stories. Who knows how long it will retreat for,but that's the thing really,why be there while it is.Im totally in agreement with you,if your your fundamentals tell you your "stock" is going to go up massively in the future.... but the charts tell you the stock is going nowhere for the next 1-3 months... then you should really hold back on pulling the trigger... Looking at the DIL chart , i cant see how any investor at this point would look at it and say wow what an oppurtunity.... these are probably the same traders/investors who were saying .. "Wow what a great buying oppurtunity @ $7.50 .... $7.00"Paul Tudor Jones quote "Losers Average Losers" comes to mind. Why catch a falling knife by taking a low probability position? Not my cup of tea anyway.I Always thought of trading/investing as strategic. DISC : Not Holding

[baller18]

Unfortunately, the motto "buy the rumour, sell the fact" also applies in reverse. I am more than happy to accumulate at these oversold prices. I am more than confident DIL will sort this, just like any other issue, and continue on from strength to strength. As with others, I'm not selling until the story changes. I hope those on the sidelines have their money ready, as any move upwards will likely occur in a fast and furious pace at oversold levels. Buyers came in thick and fast to prop up $6.30 support today, so if you can buy near that you are onto a winner, as it will not break unless there is some seriously bad news.

Remember when everyone was screaming doom and bear markets only a few weeks ago, then it rebounded and some were lef thigh and dry? DIL is going to do the same, just give it a month, you can mark my words on that!

DISC - Happy DIL holder.
You are quite bullish on this stock aren't you moosie? I hope you are right!

[baller18]

Always matey, just nervouse nellies selling it because they don't trust their own judgement. If I had any doubts I would simply look at the fundamentals and see those amazing numbers and remember what is about to come. No time to look in the rearview mirror now.

If you want to see where DIL should be, look up MKTO.NASDAQ and see the valuations there for a company on similar growth and revenue in the SaaS market, but making a LOSS each year. Then tell me, rationally, why DIL is valued at much, much less market cap wise.

Nervous nellies or not, they do have their own valid points, in regards is the compliance issue since it was not disclosed in the AGM?
Once again, stick and hold onto stocks with fundamentals which don't change.
Can compliance issue change the fundamentals? possibly...

[Mobius]

I'll tell you why.

Investors and brokerages do not know what Boardbooks is, let alone what it does, or how it helps directors and secretariats. They also haven't listened to a non-stop story given by thousands of directors of the world's biggest companies which all boil down to a single statement: "Boardbooks totally changes the lives of company directors, and they'd rather resign than lose their iPad-based board books."

It only takes 20 minutes to learn to use Boardbooks on an iPad, even for someone who has never used an iPad. It's that simple.

Diligent have an indispensable product, with essentially no competition, which saves money, and sells itself. Their market penetration has only scratched the surface. It will most certainly be a multi-billion dollar company. And in rather short order, too.

[Snow Leopard]

From the announcement (https://nzx.com/companies/DIL/announcements/238521)


...There are certain other items that may be affected by any change in revenue recognition, such as deferred revenue, deferred commissions, the income tax provision and deferred tax balances, which must also be evaluated prior to making a conclusion as to whether the errors are material for the purpose of requiring a restatement in the Company’s historical financial statements for any fiscal period. Additionally, the Company is evaluating the effect of properly capitalizing certain costs associated with software developed for internal use. These costs were previously expensed...

Sounds like they are having as much fun as they can without actually having their shares suspended :p.

Hopefully the profit turns out to be real :mellow:.

Seriously I still think that this is a good company, but not currently a holding.

Best Wishes
Paper Tiger

[Balance]

I asked a practicing accountant what he thought of the accounting issues currently being tackled by DIL.

His view is that revenue recognition timing only becomes a major problem if sales have been booked and recognized before clients pay, and if there is high churn of clients. He did not think it is an issue with DIL.

On expensing R&D, that is a very conservative approach to take and again, should not be an issue with DIL if DIL is required to capitalized R&D expenses. Simply boost short term profits and reduces profits longer term in smaller increments.

His bigger concern is that DIL is a public listed company which should not have such accounting issues. It points towards other accounting problems and more so since DIL is so sketchy with details and timing of when the issues will be sorted out.

Maybe DIL wants to wipe the slate clean and properly account right from day one, to ensure no legacy issue when listing in the States.

DIL needs to acknowledge these market concerns judiciously rather than issue cryptic statements which it has to date.

[Huskeez]

Really? If its a great company, why wouldn't you want to buy at a time when the stock is going nowhere, even if its not going anywhere for a month or even three. I really have to say that the lack of patience in investments from some is amusing - everyone is looking for a rocket ride RIGHT NOW, instead of being patient....I am by no way shape or form an investor, i am a trader i am purely in stocks until my sell signal is triggered whether that be 1 month, 1 week, 3 months, 3 weeks what ever the stock gives me. My patience comes in the form of waiting for set ups which are entered with a strict risk/reward ratio which i dont deviate from.What do you think of the HFT traders over in states and their patience? In my opinion , which you dont have to agree with, i would not purchase this stock even for the short term as its going everywhere but sideways and up, and for now is well of my buy radar.

[forest]

I thought they replied with an acceptable answer in regards to the compliance issue? Care to elaborate please? Thanks heaps

Baller 18 the company annouced there is an issue with the timing of the booking of revenue. Most people only seem to focus on this issue. I can except that a fast growing company has slip ups at times. The company has acknowledged this and I might not like this but are not to worried about it either. This issue was brought up also at the AGM and naturally got a reply similar as a announcement made to the market some time earlier.

If you were not at the AGM (and many who were at the AGM it seems) you would have mist the next reply to the question of; if there were other issues us share holders should be aware of.
I precieved the oral answer as very incoherend, the body language as there is more to come but please dont ask any more I am very uncomfortable.

How reliable is my reading of body language you ask, its hard to say.

I am not saying its a bad company, I am only pointing out that everything might not be as it seems.

[kizame]

Charts don't always provide accurate indications, in addition some investors don't care at all what the charts are supposedly saying. Rightly or wrongly (eye of the beholder), there is a possible answer for you as to why people might say this is an opportunity to buy.
Umm Excuse me , but i think this chart has very accurate indications DOWN, At the moment, Have a look!
Yes I get the fundamental thing people use as an excuse to hold a devaluing stock,but each to his own,the eye of the beholder if you wish. I'm not an impatient investor,I trade for money,not wishes and hopes,not to prove I'm right.

[Huskeez]

Charts don't always provide accurate indications, in addition some investors don't care at all what the charts are supposedly saying. Rightly or wrongly (eye of the beholder), there is a possible answer for you as to why people might say this is an opportunity to buy.Sorry mate have to clarify , i wasnt implying DIL's chart was showing a "no buy" for 1-3 months, i was simply explaining the contrast between fundamentals and technicals in stocks which DIL happens to fall under for this given time.

[Huskeez]

Right, gotcha, and absolutely agree. Im trying to learn a bit more about chart signals these days so when I get the chance I will have a closer look at DILs chart as a bit of a case study. Would you mind explaining to me what indicators specifically you are looking at in the DIL chart? Would be much appreciated.I dont use the usual TA indicators eg MACD,RSI,Bolliger band etc (although i have experimented backtested, with less than steller results) , i pretty much dont use any. I simply use price action, with some simple EMA's combined with two different time frames with weekly and daily bars along with a 2 period breakout system. Through much trial and error i have come to use this system after hours of manually backtesting which comes back with a good win/loss ratio and minimal DD.I dont really want to give away what im exactly looking at as i class everyone else the "competition" but the above is a general idea of what i look at.

[Amor Fati]

I spoke with Diligent yesterday morning just after the announcement, which anyone can do by the way.

Diligent has a new auditor, Deloitte......which we all know is great!

The registration of revenue is not when the client is signed or make the first payment it is from when the client is given the 'key' to start using.
This odd rule is written in such a way that it is left wide open to the registration of timing misinterpretation. Which is why you employ outside professionals to check, clearly the previous company weren't really up to it.

Diligent wants Deloitte to check everything so they can move forward, and they can put it to bed once and for all, which means probably checking all the way back if that is what it takes to set it right.

And I am sorry but any big firm like Deloitte, is going to find fault with what ANY other company has done before them, that is just how the big boys roll!

With that said would anyone expect any less? They are doing the right thing even if it is damn annoying! This is NOT a big deal!

The company's previous auditors were really not up to the job, however this does not change the fundamentals, Diligent is a ongoing profitable company!
They have no intention of letting any of this slow them down.
If this company was listed on US or UK exchange these notifications would have barely created a ripple, NZ we are afraid of our own success!

If you are a Trader...trade, stop gumbling it's all part of the in's and out's.
If you are a Investor.....patience.

Otherwise, if you can't stand the heat get out of the kitchen...better yet don't come in.

[zigzag]

I spoke with Diligent yesterday morning just after the announcement, which anyone can do by the way.

Diligent has a new auditor, Deloitte......which we all know is great!

The registration of revenue is not when the client is signed or make the first payment it is from when the client is given the 'key' to start using.
This odd rule is written in such a way that it is left wide open to the registration of timing misinterpretation. Which is why you employ outside professionals to check, clearly the previous company weren't really up to it.

Diligent wants Deloitte to check everything so they can move forward, and they can put it to bed once and for all, which means probably checking all the way back if that is what it takes to set it right.

And I am sorry but any big firm like Deloitte, is going to find fault with what ANY other company has done before them, that is just how the big boys roll!

With that said would anyone expect any less? They are doing the right thing even if it is damn annoying! This is NOT a big deal!

The company's previous auditors were really not up to the job, however this does not change the fundamentals, Diligent is a ongoing profitable company!
They have no intention of letting any of this slow them down.
If this company was listed on US or UK exchange these notifications would have barely created a ripple, NZ we are afraid of our own success!

If you are a Trader...trade, stop gumbling it's all part of the in's and out's.
If you are a Investor.....patience.

Otherwise, if you can't stand the heat get out of the kitchen...better yet don't come in.

Great post Amor Fati. I'll give you an A+

[Balance]

The company's previous auditors were really not up to the job, however this does not change the fundamentals, Diligent is a ongoing profitable company!
They have no intention of letting any of this slow them down.
If this company was listed on US or UK exchange these notifications would have barely created a ripple, NZ we are afraid of our own success!

If you are a Trader...trade, stop gumbling it's all part of the in's and out's.
If you are a Investor.....patience.

Otherwise, if you can't stand the heat get out of the kitchen...better yet don't come in.

Steady on, be careful there and just hang on!

This is a forum for raising, discussing and debating the issues - good or bad.

Cannot blame the auditors for the options and accounting debacles at DIL - DIL is squarely to blame here.

Cannot blame those selling out for having serious concerns about what else is lurking in the background - it's one after another.

Can only blame the company for the vacuum of information presently causing angst amongst some investors - this is not a good thing.

As long term shareholders and a believers in DIL, all shareholders have every right to express disappointment and concern.

As for standing the heat in the kitchen, this is how directors like NZOG and PRC can get away with gross mismanagement and irresponsibility - because those who care enough, sell up and move on.

Those who remain behind choose to be mushroom or sheep.

This is not what we want in DIL.

[Balance]

also good points raised balance!


Share prices do not go up in a straight line - that's the essence of why a market exists, sellers and buyers with different viewpoints.

We must not fall into the trap of wanting to only hear good news and wanting sp to go up.

Many in Pike River Coal fell into that trap - even to the extent of writing complaints to the administrator to have dissenters banned.

[Corporate]

DIL's books and records sounds like an absolute shambles. Not a good look for a high profile growth company.

It looks like it isn't just revenue but also the treatment of development costs.

Deloitte are either #1 or #2 in terms of the big 4.

[baller18]

DIL's books and records sounds like an absolute shambles. Not a good look for a high profile growth company.

It looks like it isn't just revenue but also the treatment of development costs.

Deloitte are either #1 or #2 in terms of the big 4.

Pardon the bluntness, but what are you basing this on in regards to the development costs?

[CJ]

DIL's books and records sounds like an absolute shambles. Not a good look for a high profile growth company.

It looks like it isn't just revenue but also the treatment of development costs.

Deloitte are either #1 or #2 in terms of the big 4.i actually prefer the expensing of development costs,especially on software which needs to be constantly updated. It is conservative and in my view is a better reflection of the true position - what IFRS tries to achieve. It would be far worse if they were capitalising.

[Balance]

i actually prefer the expensing of development costs,especially on software which needs to be constantly updated. It is conservative and in my view is a better reflection of the true position - what IFRS tries to achieve. It would be far worse if they were capitalising.

Agree.

Suspect auditors probably going back to basic accounting and requires DIL to capitalize, given the runaway success of its*services - 'matching' concept, accounting 101.

[baller18]

Sorry, I think thats nonsense. The financial health of this company is excellent. I agree that the ongoing minor technicalities are embarrassing, but much of this stems from Diligent's dual reporting between the US (GAAP) and NZ (IFRS) accounting methods. I agree that this is not an excuse, but a reason for the errors.

the books themselves are in excellent shape - growing cash on hand (arguably too much), powerful cashflow, ever increasing earnings, huge customer satisfaction as shown by 97% renewals.

Second that!

[CJ]

the books themselves are in excellent shape - growing cash on hand (arguably too much), powerful cashflow, ever increasing earnings, huge customer satisfaction as shown by 97% renewals.
One only has to look at XRO to see reported profit is (nearly) irrelevant for a company like this. As you point out, the strong cash flow, cash position, customer growth and customer retention is what is important from a valuation perspective.

They need to stop having these distractions, as aside from the short term SP impact, they are a distraction to management and staff who should be spending time and money on other things.

[Corporate]

Pardon the bluntness, but what are you basing this on in regards to the development costs?

Its in the most recent market announcement.

[Corporate]

i actually prefer the expensing of development costs,especially on software which needs to be constantly updated. It is conservative and in my view is a better reflection of the true position - what IFRS tries to achieve. It would be far worse if they were capitalising.

Don't get me wrong. I totally agree, expensing cost up front is more conservative. However, it doesn't detract from the fact that there are specific accounting requirements surrounding the treatment of development costs and the recognition of revenue. Not a good look for a listed company!

[Corporate]

Sorry, I think thats nonsense. The financial health of this company is excellent. I agree that the ongoing minor technicalities are embarrassing, but much of this stems from Diligent's dual reporting between the US (GAAP) and NZ (IFRS) accounting methods. I agree that this is not an excuse, but a reason for the errors.

the books themselves are in excellent shape - growing cash on hand (arguably too much), powerful cashflow, ever increasing earnings, huge customer satisfaction as shown by 97% renewals.

Wow some people around here are awfully touchy. I didn't say there was anything wrong with the financial health of the company or the ongoing profitability and growth. I'm actually looking for an entry point!

What I did say was 'books and records' referring to compliance with fundamental accounting standards! Revenue recognition and treatment of development costs are fairly significant in terms of the DIL financial statements and does raise a concern of what else could be wrong.

[Corporate]

Corporate, sorry if you thought I was touchy. I just thought you were talking nonsense. By saying " the books are a shambles", you are inferring more than just compliance with accounting standards! Most people would understand that to mean the company finances were bleak. As I mentioned, the matters are largely technical re revenue recognition.


No worries. I think we both agree the company is in great health and it is just a shame that they have been made to look very silly with some below par accounting.

[Amor Fati]

Agree 100%.

Deloitte on revenue recognition.


"Revenue is a crucial number to users of financial statements in assessing an entity’s financial performance and position. However, revenue recognition requirements under IFRSs are different from those under US GAAP and both sets of requirements need improvement. US GAAP comprises broad revenue recognition concepts and numerous requirements for particular industries or transactions that can result in different accounting for economically similar transactions. Although IFRSs have fewer requirements on revenue recognition, the two main revenue recognition standards, IAS 18 Revenue and IAS 11 Construction Contracts, can be difficult to understand and apply. In addition, IAS 18 provides limited guidance on important topics such as revenue recognition for multiple-element arrangements."

As before, a new firm, a new way of doing things, which usually means going back over old ground checking things have been done how they (Deloitte) like things done. If you pay for the best expect nothing less.


Ever the optimist, I see nothing but progress.

[Toasty]

And another DIL shareholder is born. Got a small parcel at $6.30. Turn around time now....please....

[Snow Leopard]

Good on you, you probably bought at the bottom of support. Sellers looking tired, need to hurry up and strike a deal between those big seller/buyers before we can move on, it's holding up the rest of the market...

I love to tune in to your running commentaries on the share price action, including your predictions of support, resistance and where the price is going, moosie.

Nearly as entertaining as Murray Walker (http://www.rinkworks.com/said/murraywalker.shtml) used to be.

Best Wishes
Paper Tiger

[baller18]

Good on you, you probably bought at the bottom of support. Sellers looking tired, need to hurry up and strike a deal between those big seller/buyers before we can move on, it's holding up the rest of the market...
I honestly think it could go to $6 this week moosie!
Obviously I would totally hate it!! Cos Im holding!!!
But not looking bright!
Its going to be some time for the turnaround to happen

[baller18]

Turnaround? Is the company losing money?

Because if you are referring to volatility in the share price, well, shares go up and down, particularly tech stocks. They'll go up and down by 5% in a day, and do this sometimes for no real reason.

There are probably some panicky people out there who worry that the auditors will uncover something disastrous, and are exiting because they can't cope with volatility in a tech company. Or, they might have their own reasons outside of anything to do with DIL news.
Turnaround in regards to the share price sparky, definitely not panicking as im holding long term.
Just would like a turnaround, as you would as well, but not worried, as im sticking with it long term.

[Hoop]

And another DIL shareholder is born. Got a small parcel at $6.30. Turn around time now....please....

Toasty....Lucky you..... If Phaedrus was still posting here you would be extra toasty...He would've flamed torched you big time.

still down 6c but rising up off its major 625 support ...oops hang on Its having another crack at its 625 support

[Toasty]

Toasty....Lucky you..... If Phaedrus was still posting here you would be extra toasty...He would've flamed torched you big time.

still down 6c but rising up off its major 625 support ...oops hang on Its having another crack at its 625 support

I may be missing something here as Phaedrus was gone I think before I started following this site, but why would he have torched me? Lack of investing framework? Or have I bought at a bad time?

[ddrone]

So does someone know something we don't or is the market just over-reacting. Some very large packets going up for sale.

[Balance]

Good old panic in motion. Chartists are selling at major support level $6.25-$6.30. Oversold by margins and there is no reason for all this, just a snowball effect. Unfortunately, as pointed out before, the NZX doesn't really understand DIL. Our American friends seem more than happy to buy, however, at these much reduced prices. Once the quarterly is out and the Board announces that this hullabaloo was much about squat, expect a rocket to be shoved up DIL's behind.

Meanwhile, stand clear of the freight train - I understand there are 2 big sellers out there.

[tosspot]

Yea im definitely waiting for the quarterly report to come out. Why buy before. Also the great thing with dil is you dont have to buy the minute the report is released. It usually takes a day or 3 to kickstart

[Toasty]

Phew. Lucky I got in before the price collapsed....;)

[forest]

Ok the share price for Dil went down today and only time will tell if the buyers or sellers had the better deal.

What do other members on this forum think could be the most negative issues to surprise us in the present financial year.

I am not looking for the most likely scenario, I am interested to hear from others, worst case thoughts as the situation is known now.

P.S. I agree with SPC summing up recently that DIL is likely to be a good investment, however part of me likes to understand the down side risk.

One of the nervous Nellies sinds the AGM:)

[JohnnyTheHorse]

Meanwhile, stand clear of the freight train - I understand there are 2 big sellers out there.

Have you heard whispers of who they are, or is that simply from looking at the market depth?

As far as I'm concerned, the story hasn't changed. These accounting errors have no impact on future revenues and only diverts the attention of management for a short amount of time. The current issue may impact the SP right now, but it has little influence on the SP in one year time. In my view, current prices are an absolute bargain (although it may still have some way to fall).

[baller18]

Ok the share price for Dil went down today and only time will tell if the buyers or sellers had the better deal.

What do other members on this forum think could be the most negative issues to surprise us in the present financial year.

I am not looking for the most likely scenario, I am interested to hear from others, worst case thoughts as the situation is known now.

P.S. I agree with SPC summing up recently that DIL is likely to be a good investment, however part of me likes to understand the down side risk.

One of the nervous Nellies sinds the AGM:)
In my opinion, worst case scenario would be revenues had been tampered with.
However, I highly doubt so.

[kizame]

Stock-market darling Diligent Board Member Services is seeking a High Court order to retrospectively approve shares issued incorrectly to contractors and executives.

A hearing today at the High Court in Auckland between Diligent and the Financial Markets Authority was to consider the validation request, but the matter was adjourned until July 22.

The court heard notice of the validation required interested parties to be given 30 working days notice to express an interest, but one party in the United Kingdom had been served late and the 30-day period had yet to expire.

Diligent spokesman Geoff Sensecall said a special committee set up earlier in the year in the wake of administrative lapses had identified issues with shares issued during the company's IPO in January 2009.

''One of them had to do with the issue of share or securities to staff and contractors at the time of the IPO,'' he said.

''This is an application to validate those securities.''

Senescall said Diligent had identified the issue and approached the FMA to determine how to proceed.

''This is self-reported, it's not an investigation. They're working with the FMA and this seems to be a way forward,'' Senescall said of the High Court hearing.

The FMA did not immediately return calls from BusinessDay.

The validation request comes amidst a rough patch for Diligent.

In January the company revealed it had accidentally given its chief executive Alex Sodi millions more share options than he was due.

And in April Diligent was forced to scramble and replace its auditor after it became apparent US-based Holtz Rubenstein Reminick were not able to sign off its accounts.

Sensecall said these administrative issues did not affect the core activity of the business, which was performing strongly.

''It's not operational, it's just a tidy-up. Another thing to sort out and move on from,'' he said.

Diligent shares were this afternoon trading at $6.20, a 2.5 per cent drop on opening.


Ok so those of you who are still in this stock,take heart from the underlying business comment.

[tosspot]

dil going sub $6 today. I reckon it will bottom out around $5.75 but thats just a guess

[baller18]

dil going sub $6 today. I reckon it will bottom out around $5.75 but thats just a guess

Yup seller at 5.99 already and a huge pack at $6.

[Baddarcy]

true DIL has never really been good with the PR front. I think they need to start singing like Drury and give the market some confidence back

Won't we be getting a please explain from the NZX at this rate?

[PlatnuM195]

A lot of nervous sellers today. Is the current consensus that the adjusted revenue will be significantly worse than what was originally reported?

[Balance]

Freight train derailing - stay out of the way!

[CJ]

A lot of nervous sellers today. Is the current consensus that the adjusted revenue will be significantly worse than what was originally reported?If they hve to capitalise R&D, then profit may actually be up.

As I am not as overweight on this as I use to be, I am considering topping up - will put in a cheaky bid and see if it gets hit.

[Baddarcy]

Is the current consensus that the adjusted revenue will be significantly worse than what was originally reported?

I can't see any other result than a decrease in reported revenue. It could be significant, but the limiting factor is only the new business revenue that is affected, not the revenue received from clients who have been clients for the full period (thats my read of it anyway).


If they hve to capitalise R&D, then profit may actually be up.

Yes but i presume this will mean that additional tax will be payable. Is there any chance of a fine/use of money interest etc being levied?

[forest]

Thanks Mac and baller18 for your posts.
Cant help pondering what goes on with this company.
I was wondering in the case that past financials get restated by the auditor (from my understanding this is a possiblility). It seems likely that the restatements are minor and mainly timing issues. And on the face of it DIL shareholders should be happy.

But is it possible that some DIL shareholders who are down on their investment (share price presently less 25% from top), will use the possible minor restatement of the financials to try to get redress for the company.

Remember this is a US company and litigation seems more common there.

[Balance]

Thanks Mac and baller18 for your posts.
Cant help pondering what goes on with this company.
I was wondering in the case that past financials get restated by the auditor (from my understanding this is a possiblility). It seems likely that the restatements are minor and mainly timing issues. And on the face of it DIL shareholders should be happy.

But is it possible that some DIL shareholders who are down on their investment (share price presently less 25% from top), will use the possible minor restatement of the financials to try to get redress for the company.

Remember this is a US company and litigation seems more common there.

Sp goes back up and all will be fine.

[Balance]

Meanwhile, stand clear of the freight train - I understand there are 2 big sellers out there.

Good news - one is almost completed.

[Twinklefingers]

I'm not an accountant but it seems to me that expensing R&D is a far more honest way of showing the accounts than capitalising it and certainly isn't something to punish them for. For all managements mistakes this company is printing money and it's actually funny watching peoples reactions.

I'm guessing there is going to be nothing but air underneath this stock for the next couple of weeks until their report comes out but long term no matter how they calculate it they are still swimming in cash.

[Whipmoney]

Freefall....

[Xerof]

Good news - one is almost completed.

bad news - still more to go then.......

beware of people with 'inside broker info', they are usually brokers

[andysh]

Hope you are right, got in at $6.90.

Should have waited... Ha, might have to free up money and buy some more soon...

[Dilbert]

The last announcement stated

"The revenue recognition errors identified by the Company and the other related items described below do not affect the total revenues ultimately earned or to be earned, the amount or timing of cash received or to be received from individual customer agreements, or the Company's liquidity or overall cash flow."

I really don't understand what is going on here.

[lastmoa]

The last announcement stated

"The revenue recognition errors identified by the Company and the other related items described below do not affect the total revenues ultimately earned or to be earned, the amount or timing of cash received or to be received from individual customer agreements, or the Company's liquidity or overall cash flow."

I really don't understand what is going on here.




Panic by nervous people. Once again a NZ IT company's shares are being snaffled up by overseas investors at bargain prices. Such is the degree of sophistication in understanding SAAS business models. Like you said, Dilbert, could they make it any clearer that there will be no revenue impact with errors found. Still reason for some to be nervous and jump back into Ryman or something safer. Oh well, great time to top up. 9-)

[PlatnuM195]

The last announcement stated

"The revenue recognition errors identified by the Company and the other related items described below do not affect the total revenues ultimately earned or to be earned, the amount or timing of cash received or to be received from individual customer agreements, or the Company's liquidity or overall cash flow."

I really don't understand what is going on here.



Although we assume that it won't affect total revenues, some confirmation in the Q2 report is what's needed to lift the air of uncertainty.

[winner69]

Investment is all about trust ....and DIL have put themselves in the position of not being trusted. Their governance and accounts a shambles. Outcome is always negative no matter the hype.

Over time The larger shareholders ( or those who want to become shareholders) drive the price, not mums and dads or small day traders. Nearly always about a dozen decision makers at best. At the moment that is what is happening

Maybe a combo of both .....bal says one nearly finished ...so maybe one more to go ....and then again another might join the band wagon


DIL has become a punt ...how can anybody really assess what the real numbers are.

[tosspot]

holy moly this is getting tempting to jump back in. im getting more and more happy I sold out at $8 if it hits $5 and stays for a day im back in

[bull....]

The last announcement stated

"The revenue recognition errors identified by the Company and the other related items described below do not affect the total revenues ultimately earned or to be earned, the amount or timing of cash received or to be received from individual customer agreements, or the Company's liquidity or overall cash flow."

I really don't understand what is going on here.




Is it one giant ponsi scheme ? just kidding

[Baddarcy]

Although we assume that it won't affect total revenues, some confirmation in the Q2 report is what's needed to lift the air of uncertainty.

Just to clarify we are talking about reported revenues, actual cash received from clients is not affected. My guess is the fear is that they have been grossly overstating revenue, but this would have been clearly visible in the cashflow, but given the pile of cash has been growing each quarter.....storm in a tea cup anyone?

[bonne vie]

Investment is all about trust ....and DIL have put themselves in the position of not being trusted. Their governance and accounts a shambles. Outcome is always negative no matter the hype.

Over time The larger shareholders ( or those who want to become shareholders) drive the price, not mums and dads or small day traders. Nearly always about a dozen decision makers at best. At the moment that is what is happening

Maybe a combo of both .....bal says one nearly finished ...so maybe one more to go ....and then again another might join the band wagon


DIL has become a punt ...how can anybody really assess what the real numbers are.

is it really the larger shareholders? Today we have 0.2% of the company's capitalisation traded bringing the share price down by 60c so far. I agree if a larger shareholder wants they can control the price - we only have to look at Snakk for that. But in this case it appears it is the nervous Mums and Dads and lack of larger buyers driving the price.

With regard to the revenue recognition - the year end accounts showed cash held increase of $24m while the Deferred revenue increased by only $8m. While there are other factors (creditor payment timing etc) which impacts on this, the basic correlation between the two appears very positive for the company. Likewise, if the outcome of the review concludes that the deferred revenue should have been higher then this should have a negative effect. Norwithstanding that statement, I think from memory somewhere on this link it states that the revenue was included for the whole month of the month the contract started, in which case wouldn't this indicate the deferred revenue is actually over stated e.g. correct date say 20th, but revenue deferred started on the 1st. Food for thought.

Disc - currently hold, was going to sell part due to overweight in DIL @ $8 - in for the roller coaster ride now.

[baller18]

I have faith in the SP will go back up, however, it just sucks when I know i couldve got it at another 20% discount or more in liek 2 days time.. But oh well, I didnt, and this is what the markets is all about

[Cricketfan]

As a newcomer to investing in shares, this is pretty disconcerting! I'm in it for the long-term so I hope things recover. I also invested in Mighty River Power and (years ago) Telecom when the share price was over $4 so I'm not doing too well so far!

[Hoop]

Its seems many new posters have their fingers on the floor cut off by trying to catch falling Daggers with the excuse of must buy these "cheap Shares" when the opportunity arises...

Try timing your buys by waiting for buy signals,..(see Phaedrus Method)....The more experienced may try S&R strategy with stop loss just below a support***..although I would not use this strategy due to natural illiquid problems......supports often don't work during emotional "nervous nellies" small investor sell off behaviour

The selling has nothing to do with TA investors getting out...Its a myth...TA is just showing present and past group investor behaviour ...all investors the Techies, Fundies, Mum and Dad, etc.... ..If there were any Techies involved the disciplined TAers would be out after the 21 June when all the sell signals fired off at once.

So far The OBV indicator is showing no large smart money exiting...so its the small investors selling that's doing the price damage... Confirmed by the depth figures, showing individual low volume sales.

DIL is by nature classed as an illiquid share...60% of the approx 85M shares are with trust funds etc so most of the shares aren't traded often.

.In DIL case its exponential rise has kept the volume up fooling many to think the past liquidity was normal..The illiquid nature shows up when many investors want to sell out at a similar time that they find it difficult to exit due to lack of buyers .

Cheap shares now??......Mr Market has exceptionally high expectations of DIL (Fundamentally). Its seems Mr Market now has priced in profits 2 years in advance ....Its at a point that if DIL does not deliver on those expectations, Mr Market will "seriously correct" this stock.....Investors buying into DIL from now on should remember that Mr Market has shown it is not kidding................Mr Market did not like this latest news and Mr Market kept up his end of the bargain...He whipping DIL's arse

[TimmyTP]

ASB is showing a crossed market 5.58 - 5.57

Anyone heard - intra-day auction or mad market data from the NZX again?

[Radler]

DIL


16/07/2013 12:55


S/PRICE





REL: 1255 HRS Diligent Board Member Services INC (NS)





S/PRICE: DIL: NZXR Price Enquiry into Diligent Board Member Services INC

[Baddarcy]

Well that's what i was waiting for, just had another little nibble....

[Hoop]

15 minute Chart looking promising... very short term RSI rising..... seems 5.45 support was good...price now 5.55.

Disc: Not trading this baby.

[False Profit]

If I'm reading this correctly there are big sellers ready at 5.75c and 5.85c.

[winner69]

15 minute Chart looking promising... very short term RSI rising..... seems 5.45 support was good...price now 5.55.

Disc: Not trading this baby.

Hoop - just as well Phaedrus is no longer with us eh

If he was I sense once of his famous charts plotting punters comments on it .... He just loved comments like "just had another nibble" and "she'll right herself" and "irrational market" and "I'm in for the long term anyway" etc etc. I can imagine the chart now but alas nobody will see it

He was pretty mean that Mr P

[Toasty]

Hoop - just as well Phaedrus is no longer with us eh

If he was I sense once of his famous charts plotting punters comments on it .... He just loved comments like "just had another nibble" and "she'll right herself" and "irrational market" and "I'm in for the long term anyway" etc etc. I can imagine the chart now but alas nobody will see it

He was pretty mean that Mr P

What happened to him?

[winner69]

What happened to him?

Cashed up and went on a long holiday on his yacht they reckon

[Toasty]

Legend status then.

[Hoop]

Hoop - just as well Phaedrus is no longer with us eh

If he was I sense once of his famous charts plotting punters comments on it .... He just loved comments like "just had another nibble" and "she'll right herself" and "irrational market" and "I'm in for the long term anyway" etc etc. I can imagine the chart now but alas nobody will see it

He was pretty mean that Mr P


Legend status then.
OOOhhhhh...yeah
ST lost a quality member that day

Hmmm both depth and very short term chart resistances forming at 5.75 ...good news is a floor is forming at $5.58-$5.60..

[sideburns66]

100% agree with MAC. Articulated what I wanted to say nicely :)
As I mentioned last week over on XRO, I'm invested for the long term and wouldn't call myself a trader so am not too worried about these dips, however trying to learn the best ways to time the market (although being new to investing it's not the greatest feeling), along with moosie and others I do still believe in the company.
My partner even bought some shares just over a week ago around the $5.90 mark, so I think long term we should do okay, and am looking forward to seeing DIL's new product.

[robbo24]

If he was I sense once of his famous charts plotting punters comments on it .... He just loved comments like "just had another nibble" and "she'll right herself" and "irrational market" and "I'm in for the long term anyway" etc etc. I can imagine the chart now but alas nobody will see it

This sounds both humorous and informative. I might have to dabble with photoshop and see if I can make something similar...

[ronalchn]

NZX just issued a please explain notice. It could have a few more rough days.

[PlatnuM195]

NZX just issued a please explain notice. It could have a few more rough days.

From what I saw the price inquiry actually helped with the share price action today.

[Baddarcy]

was about to say it was looking a bit quieter today so far......But sells appearing now

[Balance]

was about to say it was looking a bit quieter today so far......But sells appearing now

It has broken down through every support point so far, so my guess is that sp will test $5.30 soon.

The way the stock has been falling suggests that institutional investors/shareholders are not happy and comfortable from the answers they are getting (or are unable to get) from management.

When in doubt, they revert back to 'when in doubt, stay out.'

[Jay]

By selling large quantities they are forcing the price down further making it a self fulling prophecy -If they have been in quite awhile then maybe still in Profit.

I bought my long term ones at about $3.80 so still waiting it out for the results

[MAC]

SP was $8.20 six weeks ago, we have now seen a 31% drop, SP is sitting on a 61.8% fib retracement and is sitting on or very near to primary support.

Has anyone confident input to contribute on how undervalued DIL is at these levels, the fundamentals have not changed despite all the noise.

Where will the SP go in less than four week’s time when DIL report half year earnings ?

[lastmoa]

That's the market.

Who is right and who is wrong depends on what happens next.

I think myself that DIL these*days spends too much time taking advice from lawyers.

But there own complacency (or whatever) had created these issues in the first place, which has been a distraction on their stella progress in the business. At least showing they are seriously committed to fixing the issues and placing procedures in place to ensure no speedbumps occur in future, the can move onward and upward. I expect to see the upcoming report will ally the fears/nervousness shareholders and we can see normality reign.

[Lorne Ranger]

Sparky and I agree on the fair value of the shares being in the vicinity of $8.10. When the earnings come out, you can add a dollar to that price. Fibonnacci is holding strong and should do until that report comes out. In four weeks time the people who buy now will be laughing all the way to the bank as DIL takes a rocket ride north.

DISC - Holding and overly confident :)

Agreed. Pretty exciting times for this stock! (understatement I know), but appears a classic opportunity to follow Warren Buffet's advice of buying when the market is scared. Im quitting other lazy stocks to top up on DIL (and XRO if its goes any lower). Im an investor not a trader but this seems too obvious an opportunity to ignore.

[lastmoa]

Interesting to see what a bit of 'comfort news' from management will do to the likes of DIL and SNK.
At this rate Xero might get a 'please explain'

[JayRiggs]

Sparky and I agree on the fair value of the shares being in the vicinity of $8.10. When the earnings come out, you can add a dollar to that price. Fibonnacci is holding strong and should do until that report comes out. In four weeks time the people who buy now will be laughing all the way to the bank as DIL takes a rocket ride north.

DISC - Holding and overly confident :)

I like your enthusiasm moosie.
I have been accumulating from $7 all the way down to current levels around $5.50.
Hope you and I are proven right soon!

[robbo24]

I'm sad that I didn't sell out at the heights (mainly because I didn't expect it to fall to the levels that it reached in recent days) but I am comforted having bought more at near on the recent low.

If the fundamentals haven't changed then surely recent prices have been a bargain bin.

[Mista_Trix]

And now begins the ride back up again, once everyone realises the sky isn't falling... :-S

[Mista_Trix]

The sky wasn't falling, silly fund managers were. I'm still well seated on the airplane upwards :P

It's that doubt thing aye ... what if... what if its all going wrong.
Stay on target ... stay on target.
Copy, Gold Leader.

[lastmoa]

Interesting to see what a bit of 'comfort news' from management will do to the likes of DIL and SNK.
At this rate Xero might get a 'please explain'


.. and look what turned around Xero's shareprice, just as it did with Diligent's.
Just goes to show the irrational selling that has been going on, but as a positive it shakes the nervous holders out of the trees.

[lastmoa]

So what drove XRO down for all of 3 hours today?

I think the Xero reply to the 'please explain' didn't come out till after 1pm. Then the direction quickly reversed.
All good for both DIL and XRO. imho.

[robbo24]

Wow, 1 million shares traded at $6.00. Major new support level. Happy as Larry today :)

Not a bad wee haul over the last 24 hours, thanks to the sissies out there.

Thanks sissies.

[JohnnyTheHorse]

Not a bad wee haul over the last 24 hours, thanks to the sissies out there.

Thanks sissies.

I suspect it will be getting much bigger quite quickly too ;)

[baller18]

Wow, 1 million shares traded at $6.00. Major new support level. Happy as Larry today :)
Been so busy at work, just checked the markets now, was expecting DIL to fall to 5.3 today...
Whoa 6 is great!!!
We would be more happy as larry's today if we bought them even lower ay mossie! ;)

[forest]

I had 3 phone calls with Sonya Joyce (DIL investments relation officer) over the last couple of days this and all the good post on this side made me reverse my decision. So I am not on the sideline any longer and my nerves this time have been financially quite productive. What calmed my nerves was the possible restatement of expenses which potentially can make the financials look better :)
Thank you DIL posters for this lesson.

[Beetle]

Yes happy to pick up a few more yesterday at a good price. As a newish investor this is a great example of sharemarket jitters and holding on in there when the going gets tough. Really appreciate the positive and calming voices of the more experienced members on this forum. You are rocks!

[Beetle]

aptly named there to pick up DIL shares eh?
How's that Moosie?

[JohnnyTheHorse]

Anyone in the know willing to say what Insto's have been causing the selling pressure? My guess is that one of them would be Milford, however I consider them quite a good fund manager, so would be surprised if they were selling this cheap (unless they know something I don't). Or is it some of the US funds that bought in above $8 and were sitting on big losses? I guess we will see an SSH in the next day or two.

[goldfish]

Up again today looks like normality has resumed. Glad to have bought in at 568. Thanks panic sellers ;)

[Hoop]

Wow, 1 million shares traded at $6.00. Major new support level. Happy as Larry today :)

:confused:.......260,000

[goldfish]

Any idea of who it was? Wish i had that kind of money to play with.

[Hoop]

I think you just look at the single trades and don't read the time stamps on them Hoop. The 260,000 was part of a single huge buy order at the same time, just separated into smaller packets because there were multiple sellers.

so where is the evidence of the 1 million trade yesterday...I can't see it.

Below is the 15 min 5 day chart ........Note the price has stalled at 11.00am today

EDIT:... The Chart below is active.... and updates itself
http://bigcharts.marketwatch.com/kaavio.Webhost/charts/big.chart?nosettings=1&symb=NZ%3adil&uf=0&type=4&size=4&sid=2970890&style=320&freq=7&entitlementtoken=0c33378313484ba9b46b8e24ded87dd6&time=3&rand=1424022374&compidx=aaaaa%3a0&ma=3&maval=50%20200&lf=8&lf2=2&lf3=1&height=981&width=1045&mocktick=1

[JohnnyTheHorse]

There was a 750,000 off market (SP condition) trade at the same time IIRC.

[goldfish]

Yes i remember seeing it to, about 4ish from memory.

[Bjauck]

I had been thinking of buying some DIL in March...but it was too expensive when I came back from my vacation. That was until a few days ago when I bought a small tranche! I am just hoping that no further dodginess is yet to be revealed.....

[Hoop]

Yup, that plus the on market at the exact same time mean 1M. Does your program not manage off-market trades?

obviously not....:( ...................surely the NZX feed is better than the crappy yahoo data feed mess

ahhh...I found it...:)..using the 1 minute duration chart volume bar chart.. it's a little clearer..picks up that there's more bars than one big trade bar..all happened in that 1 or 2 minute time frame which gave it a one thick bar look

Thxs Moosie for pointing that out....whew!!!,,,The important thing is that Big Charts using NZX data feed has recognised it. I just have to be careful using these diiferent charts until I get use to them.

Far superior to Incredible charts using Yahoo data feed....that NZ yahoo feed is so inaccurate and unreliable.

[Baddarcy]

This must be the calm AFTER the storm.....

[Hoop]

This must be the calm AFTER the storm.....

Wait until the next storm (upwards) arrives :)

Keep referring back to #1926 and you may be one of the first to see that storm....

It seems my 15 minute chart I posted (#1926) is a live and updating itself....It has data to the end of today...yet I posted it on ST 12.02pm
Lets see what happens tomorrow.:D

The chart on the XRO is also live..:D http://www.sharetrader.co.nz/showthread.php?4774-IPO-XRO/page141

I remember this happening to me a few years ago on ST..

[goldfish]

Wish they would release there quarterly would give it a nice push up, I guess no one knows when thats going to be now.

[goldfish]

Thats true the last thing we need is more compliance or wateva it was issues. And its up to 650 already so thats all good. Really want to see the quarterly though.

[edm]

Wish they would release there quarterly would give it a nice push up, I guess no one knows when thats going to be now.

Hi goldfish and moosie,

http://www.boardbooks.com/wp-content/uploads/2013/07/Diligent-Market-Announcement-071213.pdf

We should be getting an update within the next 30 days from the 12th of July? Or have I mis-read the announcement?

Thanks,

Ed.

[winner69]

Indeed. I'm expecting early August.

A boy calf or a girl calf?

[goldfish]

Lol... Thanks ed, had read that I was hopeing for more exact dates, i guessing they wont announce a date just release it.

[JayRiggs]

If they say the next quarterly report is coming out within the next 30 days from 12th July, then 9th August would be the latest day possible, because it's a Friday and Monday would be too late.

[baller18]

Just bought more :)
u bought more moosie?? I bought more yesterday...
However, would've been so much happier the day I sold SLI and DIL was like 5.5...

[baller18]

Say if DIL grows on an average of 50% for the next 4-5 years, where do you see the SP going?
$15 as the limit?

[PlatnuM195]

With a new product I can see an initial spike in earnings which could average out to 50% growth over 4-5 years.

[baller18]

This is also very unlikely. There is next to no chance the new product will produce the same amount of revenue as the current product. It is likely to be a lower margin, higher consumption based on potential users product. I would see quarterly increases in revenue of over USD$3m from the new product from the 2nd quarter next year as a huge success!
How do come up with the assumption of $20?
Would easily put DIL over a billion

[edm]

Short term gains?

Ed.


Prices

Sell Quantity

Sellers


$6.160
1,800
1


$6.170
5,168
1


$6.260
9,627
1


$6.300
8,100
1

[Baddarcy]

Short term gains?

Ed.


Prices

Sell Quantity

Sellers


$6.160
1,800
1


$6.170
5,168
1


$6.260
9,627
1


$6.300
8,100
1



Probably all the short termers who got in on Tuesday getting out on Friday, had to happen at some stage.

[goldfish]

Well that was a disappointing end to the week.

[MAC]

Disappointing !

Those who bought at $5.40 on Tuesday are up 17% in three days. Congratulations if you are one of those, else congratulations to all others who entered the stock this week, there should be long term success for you all.

[Jay]

$11.94 = $1B market cap

$20 = $1.675B market cap

$20 is a long way off; need a NASDAQ listing, new product, very high margins, $100M+ revenue a year, large cash reserves and continual growth for that to happen. I do believe it is very achievable though, but maybe not for a year or two. That's why it's a long-term hold in my books ;)

I don't know, - did not need all of that for Xero to get to $18 or near enough:D

[Hoop]

http://www.investopedia.com/sites/default/themes/investopedia/img/icon_book.png

Definition of 'Blow-Off Top'

A chart pattern that indicates a steep and rapid increase in a security's price and trading volume followed by a steep and rapid drop in price and volume. The rapid changes indicated by a blow-off top, also called a blow-off move or exhaustion move, can be the result of actual news or pure speculation.

http://i.investopedia.com/inv/dictionary/terms/Blowoff.gif



http://www.investopedia.com/sites/default/themes/investopedia/img/icon_inv.png
Investopedia explains 'Blow-Off Top'

A blow-off top usually indicates that a security's price is about to fall, while a blow-off bottom usually indicates that a security's price is about to rise. A security can enter a blow-off period during which its value remains inflated for weeks or months. Day traders who want to try to profit from blow-off periods, while limiting their losses from the price drops that inevitably follow a blow-off top, can use trailing stop techniques. Day traders also use blow-off tops to identify potential gap-n-go trades.





http://i458.photobucket.com/albums/qq306/Hoop_1/DIL19072013.gif (http://s458.photobucket.com/user/Hoop_1/media/DIL19072013.gif.html)

[winner69]

Careful now Hoop - not good practice to challenge the wisdom of the market ... and moosie .... by bring things like Blow Off Tops up

Something besides punters being stupid and causing an 'unwarranted' fall is generally behind a 23% fall over 6 weeks. Over one or two days that may be the an explanation but over 6 weeks?

Hoop - if a Blow Off Top what usually happens long term?

[MAC]

Crumbs, …, I just buy quality stocks with sound fundamental forward outlooks. Buy them low and hold, perhaps they need a good healthy noise driven blow off from time to time, matters not in the long run.

[Hoop]

doesn't really fit the definition hoop..... sorry hoop, but have to disagree with you on this one...

What Rubbish!!
The only person sorry atm is you Moosie with mistimed buys and as you said "substantially under water" and to top it off buying in friday unaware of the psychology going on ...putting you deeper under water.

I'm standing on the sidelines shaking my head in disbelief on what I'm reading here....



......Over one or two days that may be the an explanation but over 6 weeks?

Hoop - if a Blow Off Top what usually happens long term?

A blow off is an event happening...It happened at the beginning of June it lasted a couple of days with extremely high volume is relation to its "normal" illiquid state..... This is a warning sign that extreme exhaustion scenario is likely to occur...sometimes the stock is able to shake it off with a pause then continue upwards (catching breath) however the more the price extends exponentially the more likely the effect will be a pausing for a day or two, then corrects suddenly and severely.
How far it corrects depends on the nature of the company the type of news that triggered the event...if the company's fundamentals are sound and the news was a untrue rumour then it will bottom out somewhere around its bull market bottom boundary ..which in DIL's case it did.

I jumped into this DIL thread in the middle of a Stampede of over exuberant emotionally charged small investors who have convinced themselves that this share will go from a 1200 bagger to a 2400 bagger ...and must buy in at any costs...and I knew I was at risk of being....decried, criticised, humiliated.. because I didn't have the same exhuberant over optimistic view as theirs.

My intention was to add some rationality into this thread .... identify the situation ...identify the effects that situation will cause...watch for the early signs of those effects .. and if you are thinking of buying in, wait until its favourable... Apply investor behavioural theory...after identifying a blow out top.............Firstly it pays to sell out quickly as very shortly after that the stock will either pause to catch its breath or more likely takes a severe drop..both ways selling out quickly doesn't hurt ...If a drop happens..it creates volatility and attracts short term investors like a magnet ....For a long termer who wants to buy in on a severe bull market correction you have to avoid these "in and out: bump and run or the dead cat specialists..Knowing that these characters are in the market you have to watch out for short term sell points such short term resistances and bump type formations ... make sure NOT to buy in on any resistance point or the bumps (MOOSIE) ....It just happened another short term negative timing was in play..it pays to avoid friday afternoon buy trades when the short termers are in play.

When should one buy with short term investors are in play???...
Remember if these guys are around it indicates that the share is in a votatile state... getting in and mistiming could cost you a 10+% loss in very quick time before the share resume its upward trend .
Also remember that the promised future resumed uptrend is not guaranteed ******
So to buy long term at the right timing you have to think like a short termer or keep away until they have played out their game....(keeping out of their way strategy).
Thinking short term...
.................................................. .................................................. .................................................. .................................................. ................................
I showed you it as it happened (bottomed)..but I think due to the constant noise and the settling dust from the stampede it cluttered out my post.

16th July 2013 #1874 Page 125 (http://www.sharetrader.co.nz/showthread.php?5408-Diligent-Boardbooks-IPO/page125)

15 minute Chart looking promising... very short term RSI rising..... seems 5.45 support was good...price now 5.55.

Disc: Not trading this baby.

I made a choice not buy at the bottom because I missed my opportunic buy in at 5.45... I would've had to pay 5.75 and risk v reward seemed not enough... in hindsight my bump and run trade would have worked.

I told you when DIL stalled (the maybe top of the bump) with a 15min time chart
18th July #1926 12.02pm page 129 (http://www.sharetrader.co.nz/showthread.php?5408-Diligent-Boardbooks-IPO/page129)

so where is the evidence of the 1 million trade yesterday...I can't see it.

Below is the 15 min 5 day chart ........Note the price has stalled at 11.00am today.........

.................................................. .................................................. .................................................. .................................................. ..............................................
My chart is still alive (http://www.sharetrader.co.nz/showthread.php?5408-Diligent-Boardbooks-IPO/page129) which was an unintended bonus... The 5.45 is just out of view ..but you can the 6.55 bump.
This bump and run is a lower risk strategy It also works off the dead cat happening event as well...
I'm quite a fan of skinning a Dead Cat only had two failures this year FBU in February and my blow by blow account on ST with RAK.....and not taking the advantage of this one.

OK the dead cat bounce event might not happen... It could still be a Bull market correction ( I mentioned that too) and shares keep rising after you sell out ..however a 8% profit over 4 days to a short termer would keep them happy and give them extra cash for their next play.

For the rest the medium termers ...You can still buy back in when the risk lowers down and buy signals start.
For the long termers you are still in as no long term sell signals have fired (watch the MA200)...accumulate when buy signals reappear.

[Xerof]

Winner,

A recent example of a blow-off top is PRC. Take a look at the chart....

You will see post BOT, price remained subdued for months/years until trading ceased

[Hoop]

Hoop - if a Blow Off Top what usually happens long term?

********After a blow out top event....the resulting correction maybe shallow (if backed up by its fundamentals) or a severe steep trend reversal (Manhattan pattern) if the share is speculative.

People think of a blow out top event as the "end of the world".....It may not be,,,it could be that long overdue healthy but severe correction .... in either event there's a strong denial behavour attached to it.....Any "outside the group" person going against the "norm" of the herd gets crucified...

Never dismiss a blow off top event as being due to stupid selling...it could be a warning, like an earthquake P wave .. a rumour that something amiss.

If the share price is backed by predicted results becoming proven then the share will correct itself and rise to a higher high (bull market correction).

However..what ever happens from now on... the sudden correction indicates that Mr Market has put DIL on notice ...DIL must now give Stellar performance to match Mr Markets high expectations....any result less than stellar Mr Market will not be pleased.

[baller18]

Hey hoop the guru, however the blow-off top has not changed the fundamentals of DIL though.
So in short term, we might have mistimed our buys, but in the long term it doesn't really make much of an impact?
Wouldn't this blow-off top affect impact a company with more hype rather than a fundamentally sound company?
Definitely not as experienced as you, so please explain if that's ok.
Thanks heaps in advance

[baller18]

Hoop - so your saying, if DIL quarterly does not meet the markets expectation we will see a severe trend reversal? Thanks

[winner69]

Hey hoop the guru, however the blow-off top has not changed the fundamentals of DIL though.
So in short term, we might have mistimed our buys, but in the long term it doesn't really make much of an impact?
Wouldn't this blow-off top affect impact a company with more hype rather than a fundamentally sound company?
Definitely not as experienced as you, so please explain if that's ok.
Thanks heaps in advance

Correct Mr Baller the DIL fundamentals have not changed - they are exactly the same as last week

What has changed is how the market sees those fundamentals -- factors like the doubt over the integrity of the numbers / what is growth likely to be / what is DIL perceived to be worth.

All variables that have some impact ... and over the last few weeks negative sentiment has set in (there are more negative vibes/punters now than a few weeks ago.

And yes to your other point - unless the next announcement is really positive maybe the Manhatten thingie Hoop talks about could eventuate

[baller18]

Correct Mr Baller the DIL fundamentals have not changed - they are exactly the same as last week

What has changed is how the market sees those fundamentals -- factors like the doubt over the integrity of the numbers / what is growth likely to be / what is DIL perceived to be worth.

All variables that have some impact ... and over the last few weeks negative sentiment has set in (there are more negative vibes/punters now than a few weeks ago.

And yes to your other point - unless the next announcement is really positive maybe the Manhatten thingie Hoop talks about could eventuateHey winner, thanks for your response.

I can totally understand how the market has doubt over the integrity of the number is what is DIL like to be worth, but, it has been cleared over many times in the air, none of this affects the revenue, isn't this correct?

Why does it have to be real positive, doesn't it just have to be in line with the expected growth and in line with the revenue?

So are you and hoop saying, when the quarterly is announced its going to be either a sharp rise or fall?

thanks

[winner69]

Winner,

A recent example of a blow-off top is PRC. Take a look at the chart....

You will see post BOT, price remained subdued for months/years until trading ceased

Xerof .... suppose a good example of a BOT .... bit spooky really .... the market sort of saying hey guys something's up

[winner69]

Hey winner, thanks for your response.

I can totally understand how the market has doubt over the integrity of the number is what is DIL like to be worth, but, it has been cleared over many times in the air, none of this affects the revenue, isn't this correct?

Why does it have to be real positive, doesn't it just have to be in line with the expected growth and in line with the revenue?

So are you and hoop saying, when the quarterly is announced its going to be either a sharp rise or fall?

thanks

Yes correct again baller .... revenues are close enough to what they have said ... nothings changed

But what are those revenues worth to an investor. Revenues leas to npat or cash flows .... market pays X times for those future streams .... nothing has changed in the sums except that X is now 23% less than what it was a 6 weeks ago.

Plenty of reasons for that rerating ... mainly sentiment not so positive and punters reducing risk factors

Your last point - a good result will see a consolidation and maybe head back to whence it came but a less than good result will see more weakness. That's how I see it anyway

[baller18]

Yes correct again baller .... revenues are close enough to what they have said ... nothings changed

But what are those revenues worth to an investor. Revenues leas to npat or cash flows .... market pays X times for those future streams .... nothing has changed in the sums except that X is now 23% less than what it was a 6 weeks ago.

Plenty of reasons for that rerating ... mainly sentiment not so positive and punters reducing risk factors

Your last point - a good result will see a consolidation and maybe head back to whence it came but a less than good result will see more weakness. That's how I see it anyway

Hey, exactly, market pays for the NPAT or cash flows, that's how we value a company isn't it?
Yes market pays x times or less but soon the value of the company soon catches up to the X...
Value catches up to X in correlation to the quarterly results if nothings changed..

[winner69]

Hey, exactly, market pays for the NPAT or cash flows, that's how we value a company isn't it?
Yes market pays x times or less but soon the value of the company soon catches up to the X...
Value catches up to X in correlation to the quarterly results if nothings changed..

"Value" is rather subjective though isn't it baller .....something "quantified" from assumptions and the prevailing sentiment of punters ( ie what X is appropriate)

And yes the shareprice will generally catch up to " value" if the shareprice is undervalued - but what if the shareprice is already overvalued?

Buying a few shares at 630 maybe is a good bet .....but if you could afford it would you pay 525 mill for the whole company?

[baller18]

"Value" is rather subjective though isn't it baller .....something "quantified" from assumptions and the prevailing sentiment of punters ( ie what X is appropriate)

And yes the shareprice will generally catch up to " value" if the shareprice is undervalued - but what if the shareprice is already overvalued?

Buying a few shares at 630 maybe is a good bet .....but if you could afford it would you pay 525 mill for the whole company?
Wouldnt you say XRO is a lot more overvalued if DIL was?

Also if the growth this year is at 50% thje PEG would be at 0.92 which definitely inidicates DIL is not overvalued by any means..
Especially if they can maintain a 40-50% growth for the next 4 years... This would indicate DIL is undervalued more than anything, wouldnt you think so?

[MAC]

Baller, sentiment can be driven by many factors. If those factors are systemic then they may be rightfully enduring, if those factors arise from panic without equitable cause then that sentiment may be short lived.

The recent drop in DIL occurred at a time when global markets were having a healthy correction and an associated risk off period. Many quality stocks with sound fundamentals and solid growth outlooks corrected in a similar way to DIL. Take ATM and SUM as two examples.

Unfortunately, DIL has acknowledged that they are correcting some accounting glitches coincident with this risk off period exacerbating the drop and perhaps encouraging panic selling by traders and short term holders who don't necessarily look to the medium term.

When DIL report in three week’s time and NPAT growth is, let’s say 70% year on year, looking back a few accounting glitches won’t be remembered. Accounting glitch, what glitch.

[winner69]

Baller - let's assume eps this year 22 cents (+50%)

That gives a pe of 30 .....growth at 50%so peg is 0.6

CHEAP AS EH AT 630

[baller18]

Baller - let's assume eps this year 22 cents (+50%)

That gives a pe of 30 .....growth at 50%so peg is 0.6

CHEAP AS EH AT 630
If its at 0.6 then DIL is definitely undervalued going by the numbers.

[baller18]

i think growth might be down a bit but the margins are going to get even better. cash pile should be $43M plus with around 58000 customers. at the current rate fy2014 revenues should be $65M plus. if ya do the maths with the current growth rate, DIL is well undervalued at $6.30. growth stocks always seem expensive when you first buy them...
Wouldn't it be better for DIL's growth rate to stay the same or increase, rather than cash piling up?

[winner69]

Hoop - does this count as Blow Off Top ..... or maybe two BOT'
'
An innovative company that promised so much but things went wrong somewhere ... and the market sort of predicted it

[winner69]

...........growth stocks always seem expensive when you first buy them...

I know Moose ... DIL looked cheap at 150 and 250 and 320 si I bought some and then started looking at expensive at 400 and 468 and 631 but still bought more

Phaedrus always remind us that the market given but the market taketh away (quickly) .... hence the needs for some plans to lock in most of the profits before the market taketh away. My method to set stop losses is using Average True Range

Phaedrus would chastise me big time because I have erred badly. Unfortunately I was tied up on a multi day project when the **** hit the fan in June and the shareprice plummeted throught the stop loss of 758. Against my better judgment (and Phaedrus said never let emption get in the way) I didn't even sell when I was back in action in early July ... that little spike back to 685 said its all an illusion and all is OK. Yes Phaedrus I have sinned and now down another 10% from what could have been - even under water for the last lot bought

Mitigation strategy now - learn from being remiss. Put that down to experience (not bad luck) and assume that all my shares cost me 630 and start again with a new stop loss on the ATR methodology. Pretty stupid eh and Phaedrus would do a special chart just for me. If I wasn't so far up it would be sad .... but pissed at letting the market taketh away more than I should have allowed

[Mobius]

.....but if you could afford it would you pay 525 mill for the whole company?

In a heartbeat.

Disclosure: worked at DIL for a decade.

[Hoop]

Hoop - does this count as Blow Off Top ..... or maybe two BOT'
'
An innovative company that promised so much but things went wrong somewhere ... and the market sort of predicted it

Nah ..Hmm maybe a minime variety..The first horn (top) has the signature but the volume is low around a 1.85M and bump is hardly noticeable (5%). The signature showed the volume spike a couple days before the drop and that slight bump (hardly noticeable on your chart)...nice two horns (double top) the devil we didn't know at the time ..eh.
I went back down memory lane today and re-read the RAK posts from April 2007 to October 2008....very interesting reading..

that second horn was on high selling volume.. before!! the results were released to the market..;)

ohh...There's a couple of my posts that would really make Moosies day..eh Winner

[baller18]

Nah ..Hmm maybe a minime variety..The first horn (top) has the signature but the volume is low around a 1.85M and bump is hardly noticeable (5%). The signature showed the volume spike a couple days before the drop and that slight bump (hardly noticeable on your chart)...nice two horns (double top) the devil we didn't know at the time ..eh.
I went back down memory lane today and re-read the RAK posts from April 2007 to October 2008....very interesting reading..

that second horn was on high selling volume.. before!! the results were released to the market..;)

ohh...There's a couple of my posts that would really make Moosies day..eh Winner

Hoop, how come you are comparing these signs to RAK?

Dont think you can compare DIL to RAK just by charts, totally different companies...

[Hoop]

Hoop, how come you are comparing these signs to RAK?

Dont think you can compare DIL to RAK just by charts, totally different companies...

Don't fret over it Baller18 ...DIL is different to RAK we all know that...so far:)

Winner posted a chart.. it was RAK and I responded accordingly to his question...Chartwise it was an example that Mr Market knew something was going on with RAK that us smaller investors didn't know...The beauty about charts is that it graphically displays group behaviour at that precise moment and back in history....certain patterns display certain group behaviour.....

Event patterns alerts us to be careful.. Us lesser mortals should never trust anything 100% ...Sometimes we don't get to hear things that Mr Market hears....remember the DOW theory "the market prices in everything" ..so when there is a price drop as what has happened with DIL you inquire and search for the reason why...you don't bury your head in the sand and say its due to irrational sellers.

RAK makes a great investor case study...a company perceived to take on the world, a company with rapid growth and producing a high tech timing product essentially needed from cell phones to guided missiles...The opportunity was huge...us investors projected foreward earnings... and at $5 with a PEG of 1.25 the share looked cheap...so why did the price suddenly go down? flatten out , went back up with comments such as "haha that will teach the gloomy sellers".....everything was looking good again, then 10days before the results the share price plummets...

Winner and I or observing this reoccurring Human Behavioural Pattern and commenting on it.....that's all....for all we know DIL could do a Google (presently at $900/share).
However even the great Google suffered a peak with a bump and run then fall back to $300 from $700 between the end of 2007/2008...

[baller18]

Thanks hoop, like to hear and learn what each member has to say.

[Baddarcy]

Court upholds mistaken Diligent share issue

Shares issued in error during Diligent Board Member Services' IPO have been upheld by the High Court.

NZX-listed Diligent was this morning granted a court order validating securities issued to staff and contractors when the company listed in 2009, after an internal audit discovered administrative errors.

The court heard the Financial Markets Authority, and other interested parties, did not oppose the order.

The validation order comes amid a rough patch for Diligent.

In January the company revealed it had accidentally given its chief executive, Alex Sodi, millions more share options than he was due.

And in April Diligent was forced to scramble and replace its auditor after it became apparent US-based Holtz Rubenstein Reminick was not able to sign off its accounts.

The share validation issue was discovered after an internal committee was formed after the options debacle to run the ruler over Diligent's administrative requirements.

Diligent shares listed in 2009 at $1 each and are now trading at $6.30 each.

http://www.stuff.co.nz/business/industries/8949079/Court-upholds-mistaken-Diligent-share-issue

[robbo24]

now to resolve the revenue timing.

The corrected, up to date revenue figures will be the important question at the end of the day, right?

[Lorne Ranger]

Thanks all for your insights and considerations, (and keep them coming), it is useful to read and help shed some light on varying perspectives. Offering your time to this post helps both it, and us, achieve greater potential.

I agree that looking back on the last 12 months, and especially the last 3, there is not a single freak out that would not have been solved by not noticing a downward spike in the first place! A little ignorance is bliss I guess, but its hard not to open that little app and press refresh. Maybe weekly views are more suitable to our investor type goals. However without pressing refresh I would have missed the DIL drop that prompted selling other shares to top up. So I guess its the discipline you mention Sparky of observation without overreaction, unless extreme circumstances make doing nothing the extreme reaction.

Well it beats 4% at the banks while making them wealthy. I could be hooked, lord have mercy.

Cheers

[baller18]

Resistance level seem to be at $6.5 for the past few days..

[tosspot]

Resistance level seem to be at $6.5 for the past few days..
Im sure it will remain so until the quarterly is released

[Slowlearna]

It looks like the $6.5 resistance level just got a little weaker.

[winner69]

I personally swear off reacting to daily news stories. Weekly news gives a much better perspective for long term holding. Perhaps that's true for technicians as well.

Just like mr talebs dentist story .....the less often you look at stock prices the less number of times of regret

[baller18]

I helped with that. Also bought at $6.40 today. Average buy price considerably lower now. Bring on the quarterly baby :)
Is that because you made some quick bux from OGC? ;)

[edm]

I helped with that. Also bought at $6.40 today. Average buy price considerably lower now. Bring on the quarterly baby :)

Yes nothing to fear moosie.

Just awaiting for the quarterly lift off :t_up:

Ed.

[Balance]

So Brian Henry has been a naughty boy?

FMA files first market manipulation case in New Zealand
10:10am, 24 Jul 2013 | GENERAL
News release
24 July 2013

FMA files first market manipulation case in New Zealand

The Financial Markets Authority (FMA) today confirmed that it has filed and served civil proceedings against Brian Peter Henry alleging market manipulation of shares in the NZX-listed Diligent Board Member Services.

The proceedings contain six claims alleging certain orders and trades made by Mr Henry in 2010 breached the market manipulation provisions of the Securities Markets Act. FMA's investigation followed a referral from NZX.

FMA Head of Enforcement, Belinda Moffat, said this is the first market manipulation case to be taken in New Zealand.

"Market manipulation interferes with the integrity of New Zealand's financial markets and harms the function of open, transparent and efficient capital markets," said Ms Moffat.

Brian Henry was a founding member of Diligent. He left the company in March 2009.

The maximum fine for breaching the market manipulation provisions of the Securities Markets Act is $1,000,000 for each contravention.

The next step will be for Mr Henry to file his statement of defence.

Ends

Contact:
Tony Reid on 021 739 052 or tony.reid@fma.govt.nz

[CJ]

So Brian Henry has been a naughty boy?I wonder what he did. Surely it cant be worst than the manipulation that took place at Blis by the major holders which was given the all clear.

The good thing is he was not a director at the time so this has no impact on DIL itself.

[Balance]

I wonder what he did. Surely it cant be worst than the manipulation that took place at Blis by the major holders which was given the all clear.

The good thing is he was not a director at the time so this has no impact on DIL itself.

Probably tried to push the sp up when he was selling down.

Haha - I would have thought the buyers would be congratulating him rather than complaining?

[baller18]

N the SP goes down to $6.4 on this news? lol

[Banksie]

I know this is a bit off topic, but what are your views on director vanity sites? http://www.brianhenry.net/

Unless they are on the professional speaking circuit what's the point? Is it just a case of self aggrandisement, or does it serve a purpose?

[Balance]

Agree this news will not have an impact on the company. Nervous nellies might sell out, but I doubt it.

i look forward to seeing Mr Henrys defence. It had better be good. The FMA will have done their homework

Just another reminder that a leopard's spots never change?

[CJ]

i look forward to seeing Mr Henrys defence. It had better be good. The FMA will have done their homeworkUP on the NBR now : http://www.nbr.co.nz/article/henry-dismisses-fma-claim-over-diligent-share-trades-having-%E2%80%98no-merit-bd-143272

Apparently he brought it to the attention of the authorities at the time.


Lets hope that the authority fines the max allowed under the law, "He did the crime and should pay the time". dishonesty should always be stamped out , basically this was fraud- ie thieft!Do you have details/background?

[GRIFFIN]

ALLEGED MARKET MANIPULATION OF SHARES IN DILIGENT BOARD MEMBER SERVICES, How ever you look at this it's not a good look.

[blackcap]

It was to do with $1500 worth of deals according to some news site. And he dealt with it at the time. Come on FMA you cannot be serious!

[baller18]

DIL does not need anymore bad news...
Even though it was back at 2010, doesn't affect SP at all.
Not an image DIL needs right now

[baller18]

Just don't understand why there would be so many worrywarts out there?
How does this impact the company at all? lol

[lastmoa]

Just don't understand why there would be so many worrywarts out there?
How does this impact the company at all? lol

Hence why I would recommend some 'traders/investors' would buy the likes of a steady blue chip like POT, RYM or SUM. Stocks such as DIL and XRO carry risk and if you cannot filter thru all the news and movement then you should invest with what your nerves can handle.
I like risk and my protection is my research. Some investments go good, some good bad. Such is life. 8-)

[baller18]

Exactly! It doesn't affect it at all! But yet, so many people are selling lol

[baller18]

Well if it goes below $6 again, going to pick up some more..

[lastmoa]

Looks like another day where the profit-taking on XRO affect the DIL sp. ..... <yawn> ..... but such are the 'noisey' markets.

[baller18]

No worries SPC! I just think funny how people are selling at these low price IMO.

[Silverlight]

No worries SPC! I just think funny how people are selling at these low price IMO.

If they were buying in at 60 cents with Mr Henry, maybe they don't think it is that low anymore ;)

[Hoop]

Remember there is the live 15min chart on page 129 post#1926 (http://www.sharetrader.co.nz/showthread.php?5408-Diligent-Boardbooks-IPO/page129) ......Its there it's free so why not use it???

At the moment that chart tells the story....when timing your buys...don't buy near or at a resistance level.

failed at 655 resistance..again!!
broken the MA50** at 11.30am ..............that's a sell signal

found support at 630..so far so good

EDIT:...MA50 should read MA50 (15min) periods

[baller18]

If they were buying in at 60 cents with Mr Henry, maybe they don't think it is that low anymore ;)
lol of course! N people who got in at 7 cents would not too eh ;)

[baller18]

Remember there is the live 15min chart on page 129 post#1926 (http://www.sharetrader.co.nz/showthread.php?5408-Diligent-Boardbooks-IPO/page129)

At the moment that chart tells the story....when timing your buys...don't buy near or at a resistance level.

failed at 655 resistance..again!!
broken the MA50 at 11.30am ..............that's a sell signal

found support at 630..so far so good
How do resistance levels work with charts? So when it gets past $6.55 when does the next resistance level occur?

[Hoop]

How do resistance levels work with charts? So when it gets past $6.55 when does the next resistance level occur?

When a resistance line is breached that line then becomes a support line and fires a buy signal....Look for other indicators to confirm...but yeah north of 6.55 is positive for the short termers, it may also be back north of the MA50 (15min) period too.

There seems to be a slight resistance around the 6.70 - 6.85 zone ..the next significant one (draw a line) is the 7.25

The area around 6.25 - 6.30 seems to be a support zone although the depth isn't showing much strength there at this moment meaning at this moment in time it is weak...the strength is a variable so tomorrow who knows perhaps the depth may strengthen up.

The rebreaking of the MA (15min)50 periods does not install confidence though as it is a sell signal so buying on the 630 support doesn't seem to be the right thing to do ..even though the short term RSI is showing an oversold situation atm...

Can you blame the traders playing games today??......no I wouldn't think so, the support at 6.30 and resistance at 6.55 makes this a too narrow a trading range for them...there are better opportunities elsewhere.

Mr Market has already indicated it will not tolerate any less than stella news from DIL ...not even this ancient history from the media it seems.

[Hoop]

Just to compliment my last post re: chart S&R lines here was the depth at that time
Note:....Remember they are variables..At the time of posting this, the 6.32 seller has disappeared and the 6.30 buyers have entered ...so the depth has less momentum but stronger 6.30 support.

Depth is out of date use as example only
supporthttp://i458.photobucket.com/albums/qq306/Hoop_1/Untitled-2.png (http://s458.photobucket.com/user/Hoop_1/media/Untitled-2.png.html)

[Xerof]

Presumably, BH's 'manipulation' (FMA), or 'error' (BH) was that he forgot he had offers in the market, and in error bought his own shares?

I must admit, when I read the article three weeks ago that they were bringing this case, I was expecting something a little more juicy than this. Anyway, await the details in due course.

[CJ]

Agree.

It is also sloppy of the FMA to not state that this is in no way related to the company or the actions of any of the company'e employees. They (the FMA) are entrusted with the stability of the financial markets, yet not stating this will have an effect on the company albeit small. May be they don't care?

Still think they should be chasing the big fish instead of looking for easy wins! Ross Asset Management is a good example. There had been prior complaints that were obviously not investigated fully!!! Shame on you!!!It was marked as Price sensitive. I still dont know how it relates to the company unless they are alleging they are implicated.

[comatose73]

Hoop, what platform did you take that screen shot from? I use ASB, and although it shows depth it does not show the recent trades (AFAIK anyway), which would be really useful... Appreciate your thoughtful and informative posts BTW - Many thanks

[Jay]

Hi C...73
It is taken from Direct Broking's website - I use both them and ASB - one for Long term one short term trading

(Sorry for interupting there Hoop)

And welcome to Sharetrader!

[comatose73]

Thanks, much appreciated!

[Toulouse - Luzern]

Agree.


Still think they should be chasing the big fish instead of looking for easy wins! Ross Asset Management is a good example. There had been prior complaints that were obviously not investigated fully!!! Shame on you!!!

I agree.

It seems to me given the failures over the last few years like Mainzeal, Ross Asset Management, Century, legions of finance Companies like Bridgestone, Lombard etc; and the abundance of potential targets for further investigation; it is hard to understand why this is the only result so far that FMA or any of it's predecessors have managed to achieve so far; and their priority and risk management; has resulted in action on a $1500 trade - if the information as posted previously is true.

Prosecuting Directors etc years later after blind Freddie, every man in the street, TV1, et al, - all know that the company has lost most or all of creditors and investors money is simply too late.

At face value - too little, too late to save Mum and Dad investors.

[CJ]

Presumably, BH's 'manipulation' (FMA), or 'error' (BH) was that he forgot he had offers in the market, and in error bought his own shares?

I must admit, when I read the article three weeks ago that they were bringing this case, I was expecting something a little more juicy than this. Anyway, await the details in due course.doesnt sound nearly as bad as at Blis where the major shareholder dumped shares during the period in with the conversion price for other securities they held was being calculated. Chalkie covered it in a great article which I am sure made everyone who read it wonder what the hell the FMA would prosecute!

[baller18]

Hey members,
Do you guys think DIL exhibits favorable long-term prospects?
Yes, i understand they are in the process of producing a new product, what I'm interested to know is 5 years down the track.
How does a 3rd product improve from the second? and how will it target the customers.

Thanks heaps in advance

[whatsup]

my thoughts are DIL will be bought out within the next few years. Otherwise, they are a fantastic company with great long term prospects

or they will go broke and the ashes will be bought out by a preditor withj enough cash to complete the job.

[baller18]

What would the ROE be on Dil? Could someone tell me please, thanks!

[baller18]

Where can I obtain companies history's balance sheets?
Thanks!!!

[robbo24]

Given the amount of cash they are hoarding, that's a very remote possibility

Look, my TA and assessment of market behaviour picks an end of week SP of $6.66. You read it here first.

In other news, I finally figured out where SparkyTheClown's picture is from: http://www.youtube.com/watch?v=8M1saIto6I8

[Balance]

Where can I obtain companies history's balance sheets?
Thanks!!!

Baller18 - are you for real or pulling everyone's legs?

I am going to assume you are an absolute newie based upon the questions you are asking so here goes :

Companies mostly all have web-sites these days and investors section.

Annual reports will show you the balance sheets.

Presentations will give you the best ideas of what companies are about and what are their strategies etc going forward.

Try it.

[winner69]

T
Baller18 - are you for real or pulling everyone's legs?

I am going to assume you are an absolute newie based upon the questions you are asking so here goes :

Companies mostly all have web-sites these days and investors section.

Annual reports will show you the balance sheets.

Presentations will give you the best ideas of what companies are about and what are their strategies etc going forward.

Try it.

Balance - He is serious

Just a gambler who thinks he is to a cert .....wil be doubling up soon ...and he/she gets the you know what when the share price falls and we fail in our duty to reassure him that all is ok

But then again the market needs punters like baller to add a (tiny) amount of liquidity

[Halebop]

What would the ROE be on Dil? Could someone tell me please, thanks!


Where can I obtain companies history's balance sheets?
Thanks!!!

Link to Diligent Investor Centre: http://www.boardbooks.com/investor-center/

You'll see further links to presentations and financial reporting.

Undiluted NTA (82m'ish shares) is around US19 cents as at FY2012. I'd estimate diluted earnings FY2013 (120m'ish shares, remembering various notes and options are yet to be converted) at US20-21 cents subject to accounting treatment of sales and sales expense adjustments and options issues (compared to US11 cents 2012, US4 cents 2011).

So forward ROE >100%

Although continued sales growth is important to valuation (at say around US$25m pa), all things being equal margin expansion rather than revenue growth will be the key contributor to bottom line profit growth. DIL will need to carefully control their expenses to achieve this.

By end of year they'll also have more than US$40m surplus cash to operating requirements. It is typical for US technology companies to hold lots of surplus cash and sometimes it's a bit mystifying to understand the value of doing it. In the medium to longer term, assuming nobody takes over or merges with Diligent, I'd expect them to use the growing surplus to fund expansion (additional countries, complimentary products) and acquire small complimentary or niche competitor businesses.

[Mista_Trix]

http://www.stuff.co.nz/business/industries/8961275/FMA-lawsuit-hurts-Diligent

The nail in the coffin for any mum and dad investors.
- consistent articles like these in the mainstream media, not necessarily 'this' issue itself.... one of too many 'bad press' articles lately.

[lastmoa]

http://www.stuff.co.nz/business/industries/8961275/FMA-lawsuit-hurts-Diligent

The nail in the coffin for any mum and dad investors.

Hey Chicken Little ... sell your shares to me.

[Mista_Trix]

Hey Chicken Little ... sell your shares to me.

Hehehe, I don't mind the hold, but its getting a little ridiculous.
The same way the main pages - herald/stuff etc have chosen to run with Xero/Ryman as glory stories, they're now over reporting the negatives of DIL.

That being said, the company does need a more front footed comms team!!

[Whipmoney]

Hehehe, I don't mind the hold, but its getting a little ridiculous.
The same way the main pages - herald/stuff etc have chosen to run with Xero/Ryman as glory stories, they're now over reporting the negatives of DIL.

That being said, the company does need a more front footed comms team!!

I almost hope that they keep it up for a while so I can accumulate on the cheap.

DISC: can't get enough.

[Baddarcy]

I almost hope that they keep it up for a while so I can accumulate on the cheap.

DISC: can't get enough.

Looks like we are going to open lower, so here is another chance :-)

[Balance]

Best buying opportunities occur whenever investors get spooked by sentiment driven events - eg. Sept 11.

Made a lot of money at that time scooping up shares as investors*ran to the hills, thinking the whole world was going to come to an end.

[Mista_Trix]

Best buying opportunities occur whenever investors get spooked by sentiment driven events - eg. Sept 11.

Made a lot of money at that time scooping up shares as investors*ran to the hills, thinking the whole world was going to come to an end.

I wish I'd been alert that day that - what was the rumor that went round on twitter - I think it was that the US president had been killed or something similar. Markets took a quick nosedive till it was proven to be false.