I have to give Vocus management credit for being responsive to shareholders. I know firsthand that the management of a public company can become beleaguered by shareholders when their stock gets crushed. So when I complained about not getting one of my questions answered by the CEO , I didn’t expect an immediate response. Yet I got one today from the CFO no less.
Vocus is one of the new companies staking out the social marketing space. It’s a cloud based software suite that includes PR Web, iContact, and tools to listen and interact with Facebook and Linkedin users. I tweeted to the CEO that “for someone who was expert at social marketing, he was tone deaf to shareholders.” It didn’t take long to get noticed. The CFO, Steve Vintz took time before catching a flight to answer some of my questions. Anyway you want to slice and dice that, that’s impressive! That’s what social marketing is supposed to be about, catching that person in line waiting to check into the Bellagio and telling them there is no wait at the hotel next door, right?
We are enticed by Vocus’s software application. It’s state of the art. I can’t tell you how well it works yet because it really is a work in progress and they won’t let you trial run it. Maybe if management reads my blog post they’ll consider changing that position. After all giving people a free or near free look got a lot of customers for Salesforce.com.
I still believe, in fact I know I am right that the Company grossly overpaid for iContact, an email list company, but the vision Vocus has for the future is big and they absolutely needed a mail product. They just didn’t need one at a cost of over $2000 per subscriber. I don’t think I’m wrong about that per subscriber figure cost as I gave Mr. Vintz two opportunities to correct my math. Instead he only talked about how transformational an acquisition iContact was. Mr. Vintz, you are right, it was transformational. It turned Vocus stock into a dog.
I was wrong though in my earlier post about when the final bill comes due. They have quite a bit of breathing room, not until February 2017 to come up with the approximate $70 million they will need if their stock is not at or above the conversion price. Either way these stock conversion deals are horrible for existing shareholders. Fortunately we weren’t one of them at the time. If the social media market stays hot for a couple more years, Vocus might be one of the big winners. My suggestion to them is that the next time they think about doing an acquisition, add CRM to their suite so small businesses like my own can have a real option to escape from the tyranny of Salesforce.com. Oh one last thing, Mr. Rudman. Please don’t overpay the next time. Sax Angle Partners, are shareholders now.