Background
Support.com ($SPRT) is a leading provider of cloud-based software and services for technology support.
Investment Thesis
SPRT is an undervalued stock with pretty poor business management but great underlying value in the stock. The market has overreacted a bit in consideration of the value of the company.
P/S 0.69
P/B 0.73
P/C 0.79
Book/sh 1.10
Cash/sh 1.01
Debt/Eq 0.00
The Net Current Asset Value (Current Assets – Total Liabilities) > current share price. Which means that, according to Benjamin Graham (and many other value investors), this is a cheap stock.
Business Management
The Former Board has pursued its’ Nexus/cloud project which was expected to generate higher returns than what it actually generated. This combined with a neglect for shareholder value by the board has led to a negative enterprise value for the company. The share price is now trading on the assumption that the former board will drive the company into bankruptcy. After a decade of decline it is to be expected.
Activist Investing
Recently however this has changed, but in my opinion, the market hasn’t yet adjusted to it.
Viex Capital Advisors, specializing in activist investing in mid-micro cap tech stocks, has ousted the old CEO and board. They have aligned interests with shareholders (as they have 14.9% of share interest). They have put forward a plan that will be linked at the bottom of the page.
Here is the recent events that have brought forward an activist investment potential:
10/31/2016 Old Board + CEO ousted.
11/03/2016 Q3 was better than forecast.
Catalyst
(1) Cheap.
(2) Potential Activist Investment.
I would welcome any feedback into how I could improve my analysis. Thank you.
Viex Capital Advisors Presentation: https://www.sec.gov/Archives/edgar/data/1104855/000092189516004870/ex10tdfan14a10114013_060716.pdf
Disclaimer:
I already hold a position in the stock prior to publishing this.
The Missed Opportunity Fund 