Brightcom Group Limited (Formerly Lycos Internet) - Way to Digitalization

They came out with a Annual report for the last year After reading the mgmt. commentary I feel worse than before. They are talking irrelevant things. No vision.

Yahoo advt. revenue
Brightcom expansion
Lycos being listed in top 10 fitness products in India

totally funny. Plz. retail it for me, if one can. Mr. Reddys letter

Hello. This is m4mayur78900…we hv some pretty decent people in whatsapp group called lycosians…we would love to have you in our group…i hv been reading your messages, which are really informative…TIA…if you are ok with it…pls text me the number…

Did anyone join con-call? Any update/insight onto
a)Daum settlement
b)Dividend payout?

Daum issue is in the final stage of settlement. and dividend will be paid in coming week.

Niraj

  • didn’t they say Daum hearing coming up 1st week of March ? They also referred to having money deposited for Daum
  • yes, heard dividend stated going out

Yes, dividend is going out from this week. but about DAUM issue they never say about final date. It is in the court matter and will be decided on final hearing date. I think they have not said that date is in march. If you know exact thing you may put your words.

I know it’s debated in different form before. But still no clear answers as to how can it trade at a market cap as almost equal to operating profit?. If there are issues in books, why SEBI or any other authorities are silent?Why no big investors are taking a look and no efforts from promoters towards roping in big investors.
Just a message saying-we were not focusing on investor relationship much is not convincing at all.

Disc: Invested

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Just a query… has anyone visited Thier office for scuttlebutt?

It is a known fact that our regulators and compliance officials of exchanges are sleeping white elephants. Listed companies, violates rules on regular basis, but still there is no action. To be specific Lycos violated Section 127 and 136 of companies act 2013.

If regulators would have followed guidelines of companies act with true spirit, entire management of Lycos would have been behind bars.

I personally filed complaint in SCORE, and to my surprise there was no action on it. After waiting for 2 weeks, called assigned SEBI investigating officer. Then happened the real miracle. She overlooked that complaint (that is why called these officials as sleeping white elephants). And when I requested her immediate attention, then only she forwarded that complaint to Lycos and in a week DD of dividend was with me.

Point over here is, if listed companies had taken investor for granted, its because rules are on paper and officials are sleeping just to see repeated cases like that of Satyam.

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There is somuch done on Lycos, i think i should add my bit.

Lycos Internet AR2016:
http://corp.lycos.com/wp-content/uploads/2014/11/Annual-Report-FY-161.pdf

page 36:
Shareholding Pattern of Top ten Shareholders (other than Directors, Promoters
and Holders of GDRs and ADRs):

Who are they?

  • Everest Capital (M) Ltd (12.91% in Lycos)

Their Other investments:

  1. Nectar Life Sciences(link)
  2. Birla Surya Ltd(link)
  3. Viom Networks Limited(link)
  4. Patni Computers in the name of GE APC Technology capital (link).Sold at 521 per share

  1. Tikona (Oak investements portfolio in India) (Share Price of Lycos when the deal happened Rs.78)

  • Sansar Capital Management (Sansar Capital & Sansar Special Opportunities Ltd-- holds 8.2% down from 9.3%last year down from 10.4% in 2012) These guys got involved with Lycos Internet in 2008 that point it was a stake sale from family and friends the share price then is close to Rs.80

  • Uno Metals+ AKG Finvest + Goenka Securities (10.8% in Lycos sold 0.1% this year)
    Their Other Investments:
  1. Uno Metals (Investments in page 50)
  2. AKG Finvest(Not their full List of investments)

Overall Not Satisfactory.

Auditors (P.Murali&Co.):
Below are the companies the Auditors also have their hands on
Virinchi (Hospitals … only company which has a stock price rising)
Cubex Tubings
ObjectOne Information systems
GoldStone Technologies
Cybermate Infotek Limited
Country Club Hospitality
Country Condos Limited
Prithvi Information systems
Pramada Finvest Ltd - Suspended Trading
Allsoft Corporation Ltd - Suspended Trading
BS Ltd - (Construction and Engineering-paid dividend but shares at rock bottom)
Cigniti Technologies
Southern Online Bio Technologies.
Vivimed Labs

Most companies are IT
Most companies have low promoter stake(or they pledged most of their holdings) and didn’t find a single company which is paying dividends(Lycos is an exception- if it paid dividend,BS Ltd paid however the stock didn’t do well).

I would keep all of this a circumstantial evidence, i am not attributing anything to anything.

Discl: No Holdings in Lycos but actively pursuing to build profile.

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What do Employees Think:
Ref: https://www.glassdoor.co.in/Reviews/Lycos-Reviews-E262585.htm

As Quoted by some:

  • Company is very thin on its vision
  • constant change in direction
  • products developed independently without product owners talking together.
  • Respect your employees. Focus on increasing your userbase instead of intentionally abusing the few remaing users you have by littering the sites with countless video ads, popups, and obscene advertisments. Success will never come if focus is only given to advertising and products continue to go ignored.
  • They make bad business decisions over and over again without learning from past mistakes. They’re concerned only with short term revenue goals to satisfy the parent company.

Lets say i only gathered data from Employees that are not happy or if they see a problem.

Most employees for every company write this as well…but just for inference

dividend started receiving to almost each and every share holders. so dividend problem is out.They have corrected their mistake.

Employees have also posted good reviews if you see your link given by you. only negative views do not hold much sense. Company is very well focused and said so in each and every conference call.
Market of digital programming and advertising are very much dynamic.If employee cannot have pace with company then they will be lagging behind for knowing further development.
Now I am waiting for only Daum issue to get settled.

Don’t understand why people are still running behind Lycos despite so many red flags. Just imagine that with such amazing topline and bottomline, can a company trade at sub 1 p/e multiples in such raging bull market? Is it even possible? I agree that market discovery might take some time, but in the bull markets we are in, there is actually dearth of value …everything with even remotest of success possibilities is priced in… and command high p/e multiples. And then we have Lycos, which despite such funky numbers is trading abysmally. This price behavior from 66 to 7 wouldn’t have been possible even in bear market…and we were in bull market!

See long term charts of the company…last 10-15 years… see how the prices have been jacked up and then keep falling… this has been repeated 4 times now… Clear indication that this is not an investment grade stock. One can hope that it would rise one day when the mgmt and operators want it to. But this is not investing!

isn’t it so funny that a company makes 400Crs + PAT is giving 10 paise dividend i.e. 4.5Cr payout to shareholders… ?

Dear mridul, please read older post. Before 2012-2013 company was lg global and after they took over lycos and made company of 2400cr turnover and 400cr profit. all are foreign subsidies. you can go through AR OF 2016. Oly Daum issue is preventing her to perform. For it lycos has to pay 25 to 30 million $ depends on court settlement. Market is not recognizing this fact. Hope it will give decent P/E after settlement.

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Company is making 400cr pat and paying its older debt. Company has paid almost 600cr within 3-4 years of debt. Extra money is used in development of digital and other business
Hope this will clear your doubts.
you can go through AR FOR LAST 4 YEARS.

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@NIRAJ_5761
I agree with your view. Most employees of every company think their company is the worst.
I like the part that all employees views of the CEO are either neutral or approves of the CEO

Board of Directors:
Annual Report16 Page 46

Y. Ramesh Reddy (LinkedIn Profile)
No negatives on the internet

Vijay Kancharla (Linked In Profile)
Couldnt find anything negative on the internet.

K.JayaLakshmi Kumari (couldnt find in LinkedIn)
Couldnt find anything negative on the internet.

Both RameshReddy and JayaLakshmi kumari are from Cambridge Technology Enterprises Ltd(a IT Company which works on Cloud - (Screener Link)

Michael Loren Mauldin (Not sure if he is earning anything out of Lycos Internet- he is listed as Chairman in AR16Page47 however he didn’t attend a single board meeting)
His Wiki Link

Subrato Saho (He profile is more into Administrative side of the business)(Linked In)
Note: He didnt even mention Lycos name on Linked In and he attended 1 in 2 meetings
I cannot be serious about his contribution

Raghunath AllamSetty:(He is the CEO of Intrepid Global Security Ltd)(Linked In)

Vijaya Bhaskar Reddy M (Couldnt find him on Linked In). However according to AR15 Page 09, he worked 23 years in marketing and has worked as a General Manager in Coca Cola.
I have respect for the presence of Marketing personnel particularly from coke or pepsi.

BTW only 4 attended AGM last year (Vijay Bhasker, Ramesh Reddy, Rajya Lakshmi Reddy(wife of Suresh Reddy) and Suresh Reddy)

I am trying to assess the crew running the show.:stuck_out_tongue:

@Mridul I as a value investor will be concerned is “is it worth my Money?”. Thou shall not concerned about trading numbers. On the flip side its an opportunity if the business is good enough.

@NIRAJ_5761 - Frequent name changes is a big negative. Why do they do that all the time… LG global, ybrant, lycos…i mean common! And such falls do not happen if the company has got an iota of potential. Lots of red flags have been pointed by so many boarders here from accounts perspective. If one chooses to ignore those, hoping things would be fine one day, nothing can be done. Long term charts doesn’t enthuse confidence here. This has risen 5 times actually (very steep rallies), and came back where it started again… With such mgmt, time is not your friend. Anyways, good luck my friend!

Overall Flags i see:

  • They had global presence and they started their business in US. They can raise cash through bonds in US or else where. However they chose to rise their cash in India at higher interest rate(from SBI,Canara, Axis Bank- Page 101,102 AR2016)

  • Bankruptcy Filing by YMA

  • Short Term Advances (Other Advances has 343+ Crore Rupees why is such a huge number in “others” Category)

  • Intangible Assets 466 Crores!!!(Page 92 AR16)

Long String of Acquistions
2006 - Medios One
2007 - Ad Dynamix
2007 - VoloMP
2008 - Oridian
2009 - DreamAD
2009 - Max Interactive
2010 - Lycos
2011 - Web 3.0
2012 - LGS Global
2016- TriTelA GMBH

Page 117 AR16:
The table lists the Net Total Assets - Net Total Liabilities as a % of total assets.
Almost every company has it at less than 20%… which is really a minute number.

Promoter (Vijay Kancharla) sold most of his holdings(13.83% to 0.8%)(Promoter Selling)

Sansar Capital Sold its Holdings( down from 8.99 to 4.92%)(Sansar Share Holding Sell, 2)

Fiora Enterprises Sold Most of its holdings(only 50000 shares left)

Tax Liabiities:
34+ Crore

Contingent Liabilities:
Daum Settlement: $30M (200 Crores approx) Daum Claims

Lycos is preparing to sell its patents, however Daum already monetized all the patents by suing Google, Microsoft & others. I dont think any patents that are left would be worth so much.

If they are making 405 Crore in profits Last Year AR2016.

Daum Payments (200) +Current Liabilities(300) + Non Current Liabilities(20) +Tax Liabilites(34)

Reserves and Surplus is 1800+ crore rupees. If all of Reserves and Surplus exist then any liability would have been written off and there wouldn’t be a bankruptcy affair.

  • They are very short in Cash and this part is written almost on all pages indirectly.

I should have to heard the other guys, i just got paranoid and just started digging everything. Such a waste of time!!!

Hi, have been going through this company for a while now,
I dont know if this has been mentioned.
I was looking at who is this Rajiv goenka who has been accumulating thru akg and uno, and also family holdings.
Earlier i thought this family must be only an intermediary holding the stock till they find some other investor. But came across this article from which i now think that this family is actually accumulating the stock for investment purpose.They did the same thing with south indian bank in 2001.http://www.thehindubusinessline.com/2001/07/26/stories/14260808.htm