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

Problem is all of these have been options for last more than one year. Isn’t it?

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Company is always in process of acquiring some another company
It looks like a company whose main business is converting black money to white
After holding it for some time I exited at loss of 10%

Lycos didn’t had the money to pay the lawer fees also in USA
That was hilarious :joy:

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SKR has this option but didnot execuate.

COMPANY has income and profit in subsidearies. but due to legaltechnical problem arised when they paid fromsubsideries. I donot know now they can pay 20mioon$ from these subsideries or not?

Hi @NIRAJ_5761- Loan from White Oak seems to not working out for a long time. Do you know why its taking time and what are the chances this can happen? The other options are highly speculative - he has spoken about selling patents earlier, but honesty I am not sure what commercial patents Lycos has. Maybe he can look at selling the software division, but again I don’t think there are any buyers since this has been a loss making division non core for them for a long time. not sure why they have stuck with it for so many years if its not a core business for them any more.

Did you hear the latest con call? will be very obliged if anyone can post the summary of what SKR discussed.

Disclosure- I have been invested in Lycos for 2 yrs now, unfortunately from higher levels. :frowning:

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Send me your whats up number . i will send you. not able to upload here. on my emale id

Can’t understand its good or bad for lycos

Mother of extreme mis governance and possible fraud:

Today received annual report of Lycos for FY16-17 i.e. 4 days before the AGM date which is clear violation of SEBI LODR regulation no. 36 (2). Lycos still in violation of Companies Act 2013, rule 136 (1) (a) and rule 136 (1) (b) by not sharing audited financial statements of subsidiaries (a total of 17 as on March 31, 2017).

Detailed analysis of this annual report reveals so many red flags, but I have to salute the courage of Mr. Reddy that even after so many goof-ups and financial crimes, he is free and out of the place where he deserves best along with auditors of the company.

Red flags:

  • On tie up with Tinbu, just do a simple google search with “Tinbu and Lycos”, there are lot of links of deal between two in 2008.

  • On Lycos shopping tie up with Nextag, have a look at this shopping portal, no one will dare to visit this site twice and buy anything ever.

  • On Lycos sport with Breaking data, just 100 downloads (as per google play store) and app content is really waste of time.

  • On Lycos Life, team is working full fledged towards launch of phase II, will management ever tell, how much they earned vs spending on phase I. App of Lycos Life, even missing from google play store.

  • Apollo Lycos Netcommerce, seems to be like a useless Chinese diwali crackers, developed just apollo leather (a group company of Apollo group) and another textile business player who knows ??

  • Last year, company delayed payment of dividend to investor within a month of getting the same approved in AGM, which was a violation of SEBI LODR regulation as well as Companies Act. However, neither it reported in Secretarial Audit nor in Statutory Audit. Seems all eyes looking other side of the table.

  • Biggest red flag, appointment of Chandra Babu Naidu & Co.; as statutory auditors. Just do a google search, and fact will come up. Most of the companies (almost all based out of Hyderabad) have appointed this CA firm while replacing P. Murali and Co. One of the partner on new firm is ex-employee of P. Murali & Co. and having just 2 years of exp. Kudos to Mr. Reddy, on such guts.

  • Non payment of PF dues for more than 6 months,

  • Non payment of Bank’s loan (Rs 79 Crores) and interest (Rs 12 Crores), hence, classified as NPA.

  • Non payment of Rs 3.27 Crore of dividend amount out of total payable of Rs. 4.76 Crores, declared for FY15-16, seems those who complaint in SEBI got the dividend rest all still awaiting.

  • No salary/other monetary benefits to Mr. Reddy and Mr. Vijay, surprising this is. Either these guys are really saints or else you know what I mean to say.

  • On standalone basis, revenue of Rs 466 Crore, company being in IT software, I am amusing at least 50% of this would be from export, however, company reported just 5.78 crores of inflow from sales and services to government of India.

  • Consolidated balance sheet, shall be renamed as “Other items Balance Sheet”, because, Other intangible assets of Rs 400 crores, other investment in affiliates of Rs 100 Crores, other advances in non current loans of Rs 150 crores, other non current assets of 28 Crores, other advances in current loans of Rs 570 crores, other receivables in other current assets of Rs 450 Crores. So overall, Rs 1700 Crores is in “others” out of total assets of Rs 2850 Crores, which is 60%. Not to mentioned, Rs 150 crores of goodwill and Rs 775 crores of receivables (which can be as good as doubtful) will wipe out the entire assets base in one stroke.

One plus point, minimum 12% holding with Goenka family (as per top 10 non promoter shareholder), which could be even more. 20% with 2 PE investor. If these three entities will try, they can easily throw out Mr. Reddy and gang but who know who is behind whom, and whose black money is getting converted into white either via Kolkata or through PE route.

Even after all these, someone saying, “All is well”, I can only request, please use your voting rights. It is starting from 9:00 AM on September 24. Please do not delay it. Every single vote will matter this time.

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I have exercised my voting rights, how about you ?

  • Reported numbers seems to be bogus, hence, I dissented.
  • Mr. Reddy has failed to ensure that interests of all stakeholders (including that of small shareholders) are safe-guarded, hence, I dissented.
  • Proposed statutory auditor is not that much qualified & credible and seems to be related to the one which was last appointed, hence, I dissented.
  • Mr. Raghunath is on board of company from last decade and hardly acting as an independent director, hence, I dissented.
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@gg4gaurav out of interest, would like to understand your original investment thesis in Lycos Internet when you decided to buy into this stock. Would you like to share this with the others who are tracking this stock?


lycos ceo interview although in telugu but ceo replies mostly in english. looks like a very down to earth person.

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Gaurav the promoters bought about 60000 shares in the last year. The cashflow statement shows Rs 150 crore positive cashflow last year and i did receive my dividend. Its impossible to pay 100’s of crores of taxes year after year like this. Management is sincere and dont take a salary, they have a vision for the future and people get most bearish when the price is best to buy.

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Hi,
After reading the views about pro’s and con’s off Lycos, the reported valuations attracted me.

So I tried to dig more, just to verify the management claims etc. I just gone through the latest annual report.
There are lot n lot loops and red flags. Just to show one such case , the part is taken from Management discussion session., where they mention about new tie up. But you can just browse that page and see the irrelevance along with I checked the Alexa rank of that page too. Pls see the below image.
Disclosure: Not holding any shares

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Hi @zain,

Tinbu is not a website publisher, its a data feed provider to the publishers. Websites buy the feed and use them to publish on their websites. This is how the model works. So its like a B2B business. Measuring the traffic on Tinbu’s website probably isn’t the right way to analyse this. Thats not their business.

Their website says that they count MSN, BING, AOL, USA TODAY, DIRECTV, Chicago Tribune as their customers. all of them are fairly well known brands atleast in the US.

They claim on their website they are the world’s leading providers of lottery feeds, horoscope and US gas prices. and if you see in the AR the company is saying it has signed the agreement with Tinbu to buy these type of feeds. Why did you find the website irrelevant or mgmt.'s claims in the respect irrelevant?

Hi @kauban

Yea, I may agree with the point that they are feed / content providers, so an analysis based on Alexa may not be the right metrics; but searching about tinbu.com, again I m getting picture of a minuscule entity. I just added the details in below picture along with I m placing few more contents from the latest A R.

Leave tinbu.com, what about tribu.com ?

Also pls try their mentioned shopping address and see how it’s working (nextag.com is fine, but not the lycos one)

Lastly what is there in developing a corporate website (apollo leathers

http://www.apolloleather.com ), not an e com site design or technology, but just a well designed , quite ordinary website.

See a company which claims to have more than 2400 cr sales, are mentioning these tiny events (may have net effect of less than 1 - 2 cr ) as achievements, whether we need to swallow it without a pinch of salt ?

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You may need to read a bit more about the company to understand them better. I am assuming you are interested so I will give you a brief intro and you can then read their previous AR’s to build the picture. Their main (In my opinion almost 90% of their top and bottom line) is digital marketing, for which they have a separate entity called Brightcom. This is a top rated player in a highly fragmented market globally. Pls visit their website to know more about what they do. There are no comparable listed peers, so very few have a good understanding of their business or how it works, If you want to understand, pls read the AR, con call transcripts and attend the con calls so you can ask Suresh. The whole industry is very fragmented and a non linear one, so don’t expect to see 1000s of employees. Even Tinbu generates 100m with just 50 employees.

The other part of their business is the software dev part which is the legacy part of their business, something that fell in their lap when they reverse merged their company (Ybrant Digital as it was called back then) with LGS Global. As per mgmt this isn’t their focus anymore but I have never understood why they have not wound this down. Anyways, have never focussed much here, given the main attraction of this company is as a digital marketing company.

The other, much smaller parts of what they have been trying are

  • Lycos Media - this is their suite of websites, where they play the role of a website publisher. I don’t think they have any branding, competitive power, and it helps generate little footfall. The only reason this fits within their overall strategy is that it helps monetise whatever little traffic they get on some of these websites.

  • Lycos Life - their health band product. Very debatable whether this is worth it or not. Personally don’t think this is even worth the effort.

  • Misc like their JV with Apollo to develop an e-commerce platform. complete waste of time.

Everything else they do apart from digital marketing is frankly not material at least in the current scheme of things. The mgmt tries various things because they have a view on how technology is playing out and they want to experiment. Why they do this is beyond me.

However, as a digital marketing company, I think they are very credible and making good progress. Visit their Brightcom website, maybe it will give you a picture.

If you still feel due to Life/Media/Apollo this is a company not worth investing in, then fair enough and each one to his own,

Btw - their shopping website is a shocker. The links all point to some other digital marketing firm. maybe something worth asking the mgmt in the next con call.

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Hi,

Just to add few more findings from my side.
So the claim of the management of 90 % revenue from yesteryear released brightcom, how they managed to achieve 1000+ cr sales for previous years? For the argument sake again we can consider advertisements based revenue.

So how good is them in that area. Let’s have a check. Company was claiming big about Brightcom (I think all those who still backing Lycos, all with these bogus balance sheet with 700+ cr receivables and lot more, as mentioned in lot of previous posts here, is just betting on brightcom future) .
So let’s look how it’s performing as the last Samurai.
In Feb 2017 it was 1st position and now it’s moved to 19th !!IMG_0728!

Now see the august ranking…

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thanks. This is a good input and really where rubber meets the road, so worth spending some more time. However, I realized that you are comparing their ranking for US in Aug vs. their ranking for International in Feb 2017.

Just for the records, the rankings (for video), like for like, are as follows:

US - 10th (Feb 2017) vs. 19th (Aug 2017)
Intl - 1st (Feb 2017) vs… 15th (Aug 2017)

in Mobile In-App, their rankings are as follows

19th (Feb 2017) vs. 7th (Aug 2017).

while this is a good data point to monitor, we should also try and put the results in context. The digital marketing/advertising wallet size is ~ $150b as per the annual report and growing at a fast pace. Its also extremely fragmented with lots of players, so consistently being in the top 20, cannot be too bad. Also if you see their scores (based on which these ranks are decided) between Feb and Aug, the drop for video is from 82 pts in Feb to 77 pts in Aug, so not the end of the world. The 1st position holder has 86 pts, and 40th ranker has 69 pts.

I am sure we will interpret the results in our own ways, but its a good input. So, thanks.