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gnulaw (51.61)

[Update1] (Pervasive:PVSW) What's Wrong With This Picture?

Recs

1

August 11, 2012 – Comments (11) | RELATED TICKERS: SPLK , DWCH , PVSW

 

(July 24, 2012) Q4/FY 2012 numbers in... Q4 2012 revenues down 6.6% v Q4 2011 and slightly below 2004 Revenues, Net Income down 41.4% YoY, Revenue up 1.7% YoY.     

                      2012        2011       2010       2009       2008       2007       2006
Revenue         49.2M      48.4M     47.2M     47.2M     42.5M     40.8M     45.6M
Net Income      1.7M        2.9M       4.1M       5.3M       3.0M      4.0M       4.8M
R&D              12.7M       11.8M     11.8M     10.6M     10.2M      9.8M      10.3M
R&D (%)        25.8%       24.4%     25.0%     22.5%    24.0%     24.0%     22.6%       

                      2005       2004       2003       2002       2001       2000       1999
Revenue         48.4M     49.6M     39.2M     37.2M     42.2M     52.1M     58.0M
Net Income      4.0M        7.3M      6.8M      5.4M      (2.5M)    (28.9M)     3.6M
R&D              11.1M      10.0M      8.0M      7.1M      10.5M     13.7M       9.6M
R&D (%)        22.9%      20.2%    20.4%    19.1%     24.9%     26.3%     16.6%

Source: 1999-2011 data:wikinvest and Pervasive.

 

 

Some initial talking points regarding John Farr's PVSWs FY12 conference call [i].

1. "...With $49 million in annual revenue we achieved our best annual revenue result in the last eight years..." -John Farr, July 24, 2012

Comment: Year 1 (2005) of "eight years" John Farr is referring to, Pervasive generated $48.4M in revenue. That comes out to .23% annual increase over those eight years to finally reach $49.2M for Fiscal 2012. John Farr should have been removed for cause immediately after the conference call.

2. Why did John Farr not mention revenue growth over nine years? Because nine years ago Pervasive generated $49.6M in revenues.

3. John Farr arguably is a good COO or CFO but as CEO has and continues to fail to create shareholder value and superior competitive advantages hence said 1999 - 2012 results. Listening to the recent conference call one disturbingly and immediately knows why.

4. Said failure to create shareholder value over a decade(s) is symptomatic of an entrenched Senior management and Board of Directors who are in a disturbing bear hug. Directors have been on the Board since the 1990's [ii]. This is an outrageous Corporate Governance fail but again confirms an alleged fraud perpetrated by an out of control Board interested solely in maximizing [insider] shareholder value viz-a-viz annual option awards (over decades) not based on performance [iii], and consistent insider SELLS and no insider BUYing on the open market [iv]. 

5. It is obvious Pervasive should have alreaady replaced John Farr given said numbers over the last [decade]. These consistent actions and patterns speak volumes of [alleged] criminal gross negligence and fraud. I maintain some of PVSWs management are unemployable. But because of said  Board and Management bear hug this hasn't changed. No one wants to lose the Insider ATM.

Let me again put said points in perspective and provide blunt-force Issues of Fact: In one year, Attunity (NASDAQ:ATTU)  [v] has accomplished what has still eluded this Management and Board of Directors.

We will accordingly continue to pursue this situation with all legal recourse including, but not limited to, working with the SEC [vi] , and largest shareholders [vii]

 

Some updates to the June 29 post [2]...

(July 17, 2012) PVSW Pervasive Software: Big Data-ready, Big Data-willing, and Big Data-able

"...Inbar positions RushAnalyzer as a replacement for MapReduce. It sounds like a self-serving -- if not quite heretical -- proposition, and it is: Inbar concedes as much, but as Inbar sees it, MapReduce isn't the solution most folks think it is... "MapReduce is, indeed, a chain and shackle in many ways because it forces you to define your compute solutions in particular ways, including shuffling a lot of data around in intermediate systems," he explains..." - David Inbar*, Pervasive Software,
July 17, 2012

* From twitter.com profile August 11, 2012

davidinbar @davidinbar Snr Director of Big Data at Pervasive Software. Interested in all things big data, #Hadoop-friendly, and high-performance applications.

Austin, TX · http://www.PervasiveBigData.com

© 2012 Twitter

 

Two weeks later the following was released:

(August 1, 2012) - Hadoop-MapReduce Market Grows Exponentially

 

Again, in case anyone missed it, Pervasive has failed to grow revenues since 2004 and has expended $150M on R&D over a decade. 

 

 

Footnotes 

[i]  seekingalpha. com/article/745641-pervasive-software-s-ceo-discusses-f4q-2012-results-earnings-call-transcript

[ii]  pervasive. com/Company/BoardofDirectors.aspx

[iii]  caps.fool. com/Blogs/nasdaqpvsw-non-insiders/690676

[iv]  caps.fool. com/Blogs/nasdaqpvsw-2011-sees-no/637589

[v]  Comment #3 above ref/ Attunity.

[vi]  caps.fool. com/Blogs/plunk-ipo-pvsw-splk-in/730708 (comments 11, 12, 13, 15, 16, 19)

[vii]  nasdaq. com/symbol/pvsw/institutional-holdings

Note: above links need to be adjusted. There is a space immediately before "com"

 

References:

[1]  (August 2, 20124 Software Stocks to Sell Now

"...This is a rough week for Pervasive Software (NASDAQ:PVSW). The company’s rating falls to D from the previous week’s C. Pervasive Software helps companies get the most out of their data investments through data management and integration software. The stock also gets an F in Earnings Momentum. Wall Street appears to agree with the stock downgrade, with share prices dropping 13.9% over the past month. The trailing PE Ratio for the stock is 64.4..."

[2]  (June 29, 2012) (Pervasive:PVSW) What's Wrong With This Picture? (Including comments 1-17)

[3]  (April 29, 2012) $PLUNK IPO. PVSW - SPLK: In Perspective PVSW - Q3 Ending March 31, 2012  (including comments 1-23) (This blog covers CTO dumping $1M in shares just before the end of q42012 (ending Jun 30) at prices > $7.00, B Riley downgrade the day before the fy2012 CC, and all the Elephants in the Room.

11 Comments – Post Your Own

#1) On August 11, 2012 at 11:01 PM, gnulaw (51.61) wrote:

[CORRECTIONS]

[vi]  caps.fool.com/Blogs/plunk-ipo-pvsw-splk-in/730708 (comments 11, 12, 13, 15, 16, 19) (link corrected) -In Re: CTO dumping $1M (150,000 shares) at end of q4 2012 (June 30) right before earnings announcement at prices from $6.85 - $7.27 and just before B Rileys downgrade. PVSW closed down to $6.55 at Friday's close August 10, 2012.

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#2) On August 12, 2012 at 8:52 AM, gnulaw (51.61) wrote:

This company is simply out of control at all levels...from the Board of Directors, CEO, CTO, Sr Director of Big Data, all marketing/Sales...as all numbers pursuant to said SEC filings (10-Q, 10-K, and FORM 4)s confirm.

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#3) On August 12, 2012 at 9:12 AM, gnulaw (51.61) wrote:

PVSW CEO John Farr simply doesn't "get it" at the most fundamental levels, hence shareholder value destruction becomes the norm and has permeated throughout the Board and Senior management and has become PVSWs culture and mindset, John Farr is not smart enough to even know this. Said mindset now in place over years has firmly established a dysfuntional codependency between the Board and Senior Managment where shareholder value destruction has become the norm and to the point the CEO is proclaiming record revenues as his opening remarks at the FY2012 Conference Call. qed

Shareholder value destruction and alleged gross negligence is "in (Pervasive:PVSW) DNA" (.)

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#4) On August 12, 2012 at 2:04 PM, gnulaw (51.61) wrote:

Short Interest

Settle Date     Short Int    Days Cover

July 31              439,717       18.51

July 13              515,713       25.87

June 29             559,704         2.55

June 15               23,758        1.00

 

Source: nasdaq .com/symbol/pvsw/short-interest

 

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#5) On August 12, 2012 at 2:19 PM, gnulaw (51.61) wrote:

Note: Per above Short Interest Table

Footnote [vi] (comments 11, 12, 13, 15, 16, 19)

In Re: CTO dumping $1M (150,000 shares) at end of q4 2012 (June 30) right before earnings announcement at prices from $6.85 - $7.27 and just before B Rileys downgrade. PVSW closed down to $6.55 at Friday's close August 10, 2012.

Insider dumping June 13-22. Note Short Interest dates above.

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#6) On August 12, 2012 at 2:33 PM, gnulaw (51.61) wrote:

"...And lastly, I’m happy to say that the Big Data team recently closed a multi-year partnership with one of the world’s leading Big Data predictive analytics companies providing both commercial and custom analytics solutions for large enterprise. Now more on this new relationship in the future, we will make further announcements following initial deployments as our Pervasive Big Data products and solutions by our newest partner..." -  (Source: John Farr, Apr 24 Conference Call, Q3 ending Mar31, Conference Call, $PLUNK Post, May 25, 2012) (Comments 5,7,22).

Is Opera Solutions the company PVSW closed a multi-year Big Data predictive analytics partnership with? 

Update 

At the May 22nd B Riley Investor Conference, page 43, John Farr presented this slide:

• Key Account win in April
– $100M (600 person) Big Data Predictive Analytics Solutions Provider

Opera Solutions?

Update

Per this afternoon's (July 24) FY2012 ending June 30 conference call PVSW is, in fact, in a (yet to be formally disclosed) alliance with Opera Solutions.  

This may be one of the most messed up disclosures in history...still not formally disclosed.

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#7) On August 12, 2012 at 2:38 PM, gnulaw (51.61) wrote:

B Riley Downgrades PVSW The Day Before July 24 Earnings Call. Pervasive CTO SOLD 150,000 shares June 13-22, i.e. days before the end of Pervasive's Q4 FY ending June 30, 2012 (see comment #5 above). Not only were these stock SELLS during the alleged Blackout/Quiet/Closed Trading Window period for Pervasive insiders esp given the fact the CTO is a Director but these trades may also be an alleged violation of the Insider Trading Sanctions Act of 1984 and the Insider Trading and Securities Fraud Enforcement Act of 1988.

Q1. How does B Riley issue a downgrade the day before the Earnings Call?

Q2. What did the CTO know and when did he know it?

 

Note Comments 1,4,5 above in re: Short Interest

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#8) On August 13, 2012 at 5:24 PM, gnulaw (51.61) wrote:

Well, quite a day today. Less than 18 hours after the above comment was posted privately-held Actian made a public proposal to acquire Pervasive for $8.50/share. What is unusual about this offer is that Steve Shine, CEO Actian, commented

"...We are surprised that Pervasive has declined our repeated efforts to engage in negotiations,” continued Mr. Shine. “We look forward to Pervasive’s careful and serious consideration of our proposal and an open dialogue with its Board of Directors to complete this transaction. It remains our strong preference to reach a negotiated agreement with Pervasive, and we are confident that working together, we can reach a mutually agreeable transaction in a quick and efficient manner that will benefit both companies and our respective stakeholders...".  

As of 5:00 PM EST Two Law Firms have already launched two separate investigations into possible breaches of fiduciary duty by the Board of Directors. Rigrodsky & Long, P.A. and  Levi & Korsinsky, LLP.

Only one thing to say at this point. qed

Story developing...

 

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#9) On August 13, 2012 at 9:19 PM, gnulaw (51.61) wrote:

At 8:00 PM EST Faruqi & Faruqi, LLP issued the following release:

Faruqi & Faruqi, LLP is Seeking More Cash for the Shareholders of Pervasive Software, Inc. (PVSW)

 and what do you these PVSW Institutional holders will react?

 

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#10) On August 13, 2012 at 9:35 PM, gnulaw (51.61) wrote:

[CORRECTION]  and how do you think these PVSW Institutional holders will react?

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#11) On August 13, 2012 at 9:55 PM, gnulaw (51.61) wrote:

 

46 Institutional Holders
8,961,974 Total Shares Held (54.7%)

ROYCE & ASSOCIATES LLC     06/30/2012     1,461,500

DIMENSIONAL FUND ADVISORS LP     03/31/2012     1,393,073

DIALECTIC CAPITAL MANAGEMENT, LLC     03/31/2012     1,239,125

ARIEL INVESTMENTS, LLC     03/31/2012     703,375

FMR LLC     03/31/2012     613,384

RENAISSANCE TECHNOLOGIES LLC     06/30/2012     613,002

VANGUARD GROUP INC     03/31/2012     419,015

BARCLAYS GLOBAL INVESTORS UK HOLDINGS LTD     03/31/2012     394,619

WESTWOOD MANAGEMENT CORP /TX     06/30/2012     372,891

CANNELL J CARLO     03/31/2012     283,646

PUNCH & ASSOCIATES INVESTMENT MANAGEMENT, INC.     06/30/2012     233,289

DALTON GREINER HARTMAN MAHER & CO     06/30/2012     182,365

POLAR CAPITAL LLP     03/31/2012     140,893

TETON ADVISORS, INC.     03/31/2012     115,096

CALIFORNIA PUBLIC EMPLOYEES RETIREMENT SYSTEM     06/30/2012     97,800

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