|Another 660,000 stilo shares sold in one batch for 6.60 pence going straight to Brewins who will slowly increase from there current 19 million plus holdings to 30 or 35 million shares. I was asked if I would be happy to offload my entire holdings today and the answer was "no"!|
|As you say,clocktower,the Caribbean is not my bag,nor more importantly that of MRS M.
Bakunin,ramping is not an obscene word;it is just wildly misused on ADVFN.|
I'm not trying to ramp Stilo.
Just pointing out the potential.
There are, of course, factors tempering whether that potential can, if ever, be achieved, eg will they have sufficient clout, do they have sufficient developers to keep hundreds, let alone thousands or millions, of users productive in the face of the inevitable emergence of bugs/issues that need fixing in real-time once the product is launched? Large corporations will obviously want to assess whether a minnow like Stilo can provide the service that they need before even considering a product like AuthorBridge. On the positive side, they will not have to be debugging complex math/network routing algorithms etc. An editor is not rocket science.|
|LOL that was bleeding funny big time clock. I have just picked myself off the floor.|
|LOL - mud, you already can afford one of those Islands if your huge successes of the past have not been diluted by losses elsewhere, that have not been easily tagged.
Good Luck but I doubt if you would enjoy being there for anything more than a holiday.|
A couple of years ago Bakunin assured me that Stilo would generate sufficient dealing profits to fund the purchase my own Caribbean Island.
I live in hope !|
|Bakunin, mudbath and SL those are fantastic posts which have given me a far greater insight into the history of the company. Bakunin, particular thanks for such a lengthy post regarding Stilo's IP re: intangibles. I won't pretend to understand everything that you have written about Omnimark, Migrate and AuthorBridge, but it gives me a very good flavour.
I hope you're correct about AuthorBridge's latent potential.
|I completely and utterly agree that the so called "baby" here is Omnimark. It always has always been. Without Omnimark Migrate and Authorbridge would not exist. If I can recall, Stilo paid quite a substantial amount of money when they bought Omnimark many years for millions. I think the previous owners of Omnimark was a company based in Germany.
Its the very nature of the technology and the very nature of the customers that have resulted in these so called tools of Migrate and Authorbridge taking a very long and incremental processes to get to where they are now. One of the biggest competitors for Stilo when it has come to Migrate has been their clients themselves which has resulted in Migrate revenues remaining so, so low after so many years. Those very clients or potential clients deciding to do the work themselves by throwing their own people at the task. If Stilo's Migrate product was the exclusive product that could do the documentation conversion then the money would have by now rolled in, but it wasn't and didn't.
Going forward, Authorbridge and Authorbridge Cloud will now give organisations the choice of having Authorbridge imbedded onto their own systems or (for those occasional users and smaller organisations) to simply get up and use it in Stilo's cloud system. This obviously is still going to take time. Time to get those clients on board, marketing, converting clients etc but in the meantime those customers that are now converting and coming on board will bring in handsome additional revenue and profits.|
I very much appreciate your analysis.
I think there might be another early-stage gem in OPG.
I don't know a lot about doing business in India, but it looks well/conservatively-managed and good on paper.
Any comments if you have the time to take a look?|
|Thanks for your detailed and thoughtful input Bakunin.
Its good to see you according Stilo serious consideration for,like michaelmouse and myself,your endless search is for those companies with latent 10B(or more) possibilities.
Your message,regarding value is adroitly phrased and a pleasure to absorb.
I have laboured for years to convey the gist of your post,obviously without much success.
|Re intangibles, value of the IP:
Stilo have been capitalising the AuthorBridge development costs. They have been spending roughly £100k per year on AuthorBridge, which led me at one point to proclaim that it was a simple editor that an A-Level student could develop in his bedroom.
So, the accounting value of the IP is indeed low.
What I didn't consider before my ill-conceived remarks was the fact that it is virtually ONLY Stilo that can actually develop a product like AuthorBridge, despite there being a vast array of XML/DITA editors available. The reason for this is because it will not only be an editor, but also a conversion tool as it will incorporate the technology behind Migrate which in turn incorporates the Omnimark technology. Now, in its heyday, Omnimark was THE standard XML conversion tool. It boasts a complex API for specifying streamed conversion of XML via a regular expression language and other stuff. After Stilo got their hands on it, they did not manage to monetise it in any meaningful way. They first continued the Open Source route of its founders, the route followed by many stalwarts today like Red Hat, and then did a volte-face and became very strict on licensing it out, but the number of developers interested in using it on an annual fee-paying base dwindled - simply not enough mission-critical use cases, so developers contented themselves with DIY conversion using Java regular expression capabilities.
So, Stilo developed Migrate as a service using Omnimark to generate revenue from Omnimark, but the demand for that has been underwhelming.
So, this all explains the historical lack of serious revenue at Stilo.
However, they are still the owners of the Omnimark technology. Which means that only they or their licensees are able to develop eg an editor that has Omnimark conversion technology embedded in it. I would hope that their licensing T&C includes a provision for the necessity to pay royalties in addition to the license fee in the event that a licensee were to develop a product for mass commercialisation.
In other words, it only makes sense for Stilo to develop an editor like AuthorBridge.
What is the need for AuthorBridge?
It is my conjecture that the following has materialised over the past few years.
I would be amazed if Migrate does a perfect job of converting XML to DITA.
After all, the user has to write specific templates to drive the conversion process.
Each user will write different templates for different types of documents.
OK, so a typical Migrate customer will spend time developing templates, then run his documents on Migrate, then open them up in a DITA editor, such as the Adobe one, probably finds that some of the documents need a lot of tidying up, so edits a template, re-runs Migrate, etc. It is not that he is charged each time he uses Migrate, but rather the hassle involved in all of this process that has surely kept Migrate revenue to their low levels (most revenue still comes from historical Omnimark licenses). It probably all works out more convenient than using any in-built Adobe XML-DITA conversion features, but I for one would consider it a big headache. When you are dealing with thousands of documents, they are all versioned and stored away in repositories etc etc, so the amount of manual labour involved will be substantial and only a few customers will be experiencing sufficient pain to want to embark on a wholesale XML-DITA conversion process. The ones that make up the small Migrate revenue total to date.
So, the great promise of AuthorBridge is presumably that the above-described process gets streamlined considerably and ALL of the work takes place within one interface, AuthorBridge, where the user can check out a version of a document from a repository, design his templates, launch the integrated Migrate/Omnimark technology to convert the document, mmediately within the same interface see the results, iterate etc. And, when he is happy with it, if the templates will work ok on other similar documents, probably feed thousands of documents into the online batch Migrate service and pick them all up afterwards in AuthorBridge.
Since Stilo are the only ones who can provide this level of sophistication because they own Omnimark, they have a potentially enormous market ahead of them. Especially as AuthorBridge will exist as both a stand-alone product and a cloud-based product, to my knowledge.
So, once those customers who use AuthorBridge for the conversion facilities have finished their document conversion, it would make sense for them to continue using AuthorBridge going forward. This was always a concern of mine, the limited size and finiteness of the conversion market. But, I was far less concerned about this once Stilo announced that AuthorBridge would be a cloud-based editor, as it is easy to see how large corporations eg IBM can orchestrate the documentation produced by sub-contractors etc via AuthorBridge.
So, why hasn't AuthorBridge already dominated the XML/DITA editor market?
Because of the complexity involved in getting document import/conversion as automated as possible. Development work which, coincidentally, is VERY slow. It is no good taking on dozens of developers, designing new features for AuthorBridge and getting them to code it out as soon as possible. What needs to be developed will be communicated back to Stilo by those already using the product so far, what they need/want, the problems they are having. And this communication path is a very slow one.
In conclusion, although Stilo have spent very little on developing AuthorBridge, its IP value is exponentially higher because of the exclusive ownership of Omnimark.
If they ever get the user complexity down to near complete automation of the conversion process, AuthorBridge will be in great demand and they will have a monopoly position.
An offer for Stilo won't get made imo until the AuthorBridge product is fully developed and bug-free, ready to be monetised on a mass scale and carried forward into other use cases. What Stilo could do with real-time streamed XML conversion, eg aggregating IoT data in XML/DITA format for reporting etc purposes eg AuthorBridge being a kind of IoT dashboard, is pretty mind-blowing. At that point, it would not be in the shareholders' interests to sell out for something like £30m. The technology would be worth far more. The question is what the acquiror would offer the directors in addition to cash for their shares.|
|SL - Yes followed mud (the fund manager) and this for many years - Management will play this as they have done over the many years, why would they change, other than to start to award themselves higher salaries and big share options to discourage a takeover, if they feel threatened imo.|
|I certainly hope not clock. In 3 years from now I would expect management at the very minimum to be generating £3 mill revenues. This is a bare minimum. Nevertheless I can certainly see why you have such a view. I am assuming that you know the history of Stilo over many years.
Anyway, why do you feel this saga will continue? Are your views any different with the new Authorbridge product?|
|The STL saga continues, expect the same for years to come - only change is the range from 1-3p now 5-8p - 2020 maybe 8-10p|
|I agree with some of what you say escape and I am sure everybody who has frequented these boards and have some knowledge about Stilo's history will know how the company performed for many, many, many years. Ticking along, shares remaining around the 1 to 3 pence mark, huge amount of illiquidity in the shares for many, many years and stubbornly not moving for many, many years, even when the company threw everything at them including the kitchen sink. As far as I am concerned my criticism was justified completely and one cannot just accept what others say "willy nilly" at face value if one feels that something is not right.
In relation to "contrite" (lord be with me...amen!!!) I have put my money where my mouth is and I have bought a significant amount of Stilo shares over some time now. The circumstances at Stilo have now changed considerably and I have given my own reasons as to why this has happened alongside others. many times.
In closing I will say that I am not "become very positive" on Stilo but "very, very, very positive on Stilo and its management. The situation at Stilo has changed massively and I have no doubt that things are moving forward very nicely. Naturally, I would like to see operations at IBM and others to move a lot, lot, lot faster but the nature of the work involved, the companies that Stilo work with and the technology itself is not something that will move overnight as has been the case with development of Authorbridge at IBM that has taken some 2 to 2 and a half years.
Finally, I would suggest that "if your going to buy a few more, you should dig deeper and buy a lot more"!!!|
|escapetohome, do you frequent THE SHED ?
We used to go to the dogs at Thrum Hall many decades ago.
Happy days !
What about you firth,for I remember you as a greyhound handicap expert in the days of yore.
Happy days indeed.|
|Thank-you Michael Mouse , I have been following stilo for years , probably for 5 years or so , just dropping by from time ro time , not reading the posts seriously , just picking up a flavour. i saw it crash to around 2p and thought about buying shares. I never bought the shares.
At that time i was reading stilo losses posts , and i think he was feeling the pain as he was constantly challenging mudbath and being quite negative. I found the posts amusing. When the share price rose strongly , i thought he would be contrite , but he wasnt.
More recently though he seems to have become very positive, i bought a few shares and am going to buy a few more.|
|The Aveso thread made very interesting reading, especially with bid speculation continuing to do the rounds for some 7 years. Of course, in the meantime we all now know how the business continued to prosper which ended with Avesco being a 20 bagger.
7 years of speculation on those threads and, of course, Murray and TAYA during those times build up a considerable holding.
IBM and Stilo have been working on Authorbridge for about 2 years plus now to get it to where it is now resulting in the full implementation within that business unit. The question then really would be how long will it take for this collaboration to be completed? I'm sure if Stilo had it their own way they would have liked this to have been completed by now but with IBM being what it is and technology being what it is it will probably take some time yet but how long? Of course, in the meantime Stilo has got a lot of other clients that they continue to work with in relation to Authorbridge.
If a bid came in at around $50 million I would probably do you a big, huge, massive favour mud and go into retirement.....Then again, I would probably have too much time on my hands and may take the mouse route!|
|Absolutely Mouse I think that is quite common with most investors that they love what they do and will not consider retiring. No reason why you should stop and certainly no reason for you to reveal those zeros.
I have been very keen on Stilo for some time now and my "sauce" as you have probably worked out is another very good reason as to why I am totally bullish on Stilo.
Incidentally, I cannot recall how you got to find out about Stilo?
I did actually read the Aveso thread and it certainly made very good reading indeed.|
|Interesting thoughts as ever Mudbath. Thank you.|
|I was wondering how you might respond,michaelmouse;so well said.
Your discussions on the level "intangibles" has been interesting,but not a factor,where STL is concerned,to which I would accord much weighting.
Stilo managed to rack up a P&L deficit of £10 million prior to the 2013 Capital Reduction Scheme,so I feel that those stakeholder losses should be taken into account when evaluating the potential level for any agreed bid.
Most important imo will be the status of AuthorBridge at that time, as this does appear to be the game changer.
Originally AB was seen purely as a guided + fluid authoring tool for occasional contributors with no knowledge of XML or DITA.
Subject matter experts were then brought into the fold,whilst Les Burnham and his team are now anticipating much wider use of AB,indeed permeating throughout the whole enterprise.
Our CEO sees AuthorBridge in "mass use",especially among XML resistive groupings.
AB can now be incorporated into diverse workflow scenarios and evolving enterprise systems,thus aiming not only the SMEs,but also other collecting contributors,incorporating developers and engineers together with ID professionals and others.
For "mass use",read "many thousands of users".
Les Burnham's latest quote(last month) for its pricing was US$ 100 per user !
Once the collaboration between IBM and Stilo is complete,or at least has delivered the technology to within a range of targeted functionality,then possibly Stilo could lose its independence.
For me the £16/£20 million figure proposed on this Board looks way too low;but we shall see,one way or another,in the fullness of time.
US$ 50 million would prove admirable from where I am standing.|
|SL - I never discuss my finances.
Investors who have followed me and read my blog from time to time can come to their own conclusions.
I'll just say this. I love investing in the stock market (micro-caps in particular) and would never consider retiring from doing what I thoroughly enjoy. This is fun for me so why would I ever stop?
The thrill is trying to unearth the next multi-bagger. Will it be Stilo or another of my holdings? That sadly I can't answer with any degree of certainty.
Anyway, weren't we discussing your "sauce"? ;)
I like your bullishness on this stock SL. I also think 2017 onwards will be a pivotal year for Stilo for the reasons you have cited.|
|For me personally it would be very disappointing if the offer came in at £16 to £20m as I too am looking for lot, lot, lot more than this. Incidentally, if it was around £16 to £20m then I too would sit on a very, very, very substantial amount of dough.
I agree with you totally that it's best to strip out the intangibles completely as this figure can really be utterly confusing for shareholders. It can easily be too high or too low.
My understanding is that when they use to include the word "rapid" in their annual reports and when they last included it in March 2014 report for the 2013 year end results the expectation was that Authorbridge was going to be released soon alongside other developments and the "expectation" was that they were going to make some "serious profits".
However, roll the clock forward from March 2014 by 34 months to January 2017, yes that's nearly an incredible 3 years and Authorbridge is yet to hit the market properly (though it has had a controlled release since January 2016), Authorbridge cloud is about to be released in the next couple of weeks or so; and, Migrate Jats is now been launched and being marketed to potential clients. All this really now taking effect in January 2017 onwards and not at the time when they used to include the word "rapid" in their annual report in March 2014.
So now is the time, from here onwards, that we can really start to see some action, especially on the Authorbridge side with Migrate Dita being backed up with Migrate Jats, not forgetting Omnimark to finish off.
Stilo has never in its history been a company to release many RNSs or PRs and never will. Just like you said Mouse they just get on with the job.
Incidentally, Mouse, with your incredible 20 multi bagger with Aveso, not forgetting the countless dividends that you got from them, would you not have been in a position to now retire or does this game make you more hungrier?
As a serial investor myself and with your expert knowledge with Avesco from 2009 onwards, I would have thought that you would have at least invested £50,000 to £100,000 in Avesco and at the very least by now be sitting on a million to 2 million?|
|Firstly, as stated SL, I would be quite disappointed if they took a bid at £16m-£20m even though that would give me a very sizeable return on my investment. I am looking long term and considerably larger percentage gains (hopefully).
In terms of their IP valuation, as explained, I strip it out of my calculations anyway. However, the analogy with Avesco is a reasonable one.
In March 2016, intangibles at Avesco were around £220,000. Tangible assets were around £2.31 per share. Trading EPS was around 18p year end 2015. In summary, the £6.50 bid was more than twice the last reported TNAV, and 36 times the 2015 reported EPS figure. That's a great deal for AVS shareholders even though I could justify it on future projected EPS. It's a long-winded way of suggesting that the intangible value of the company was significantly more than £220,000. In fact, several million more I'd venture and if you read the narrative in the offer RNS, that's exactly what's suggested.
Some investors may remember a company called Burst Media. From memory it was loss making with very little cash, and a poor balance sheet. It didn't stop Blinkx taking the company out for 5/6 times it's then market cap because of the perceived intangible value of it's client list, although I'd have to confess I can't remember the figures for intangible value in Burst's accounts.
In short, some companies won't be able to justify sticking in the correct intangible value even though they know it exists e.g. you can't really say the quality of our customer base and staff are worth £x million or our brand name is worth £x million with any real degree of confidence imo. Hence I ignore intangibles since they can be wildly under or over stated.
Finally, you asked about "rapidly" being taken out of their annual reports. Great. Understate and over deliver is preferable to the opposite scenario. I keep saying even small incremental revenue growth is significant to Stilo's bottom line. Not rapid growth, but more than good enough. Rapid growth would be the game changer and make it a massive multi-bagger.
Like Avesco the company releases very few RNS or PR statements and just gets on with the job.
At times with Avesco, I thought I'd die of boredom. It was worth waiting for though.|