“Digital marketing firm Lycos Internet Ltd will acquire 100% stake in Austria-based mobile solutions provider TriTelA Gmbh in an all-stock transaction giving it access to cloud-based technology that can help broaden its consumer services.” -
There is no internet footprint of TriTeIA Gmbh at all. So much for a cloud based firm acquisition which does not have it’s own website !
An all stock transaction makes the legitimacy of this purchase extremely doubtful. IMHO, Lycos is a dinosaur in the age of Star Wars. Any foreign firm who understands the current pace of technology will probably refuse a piece of this business and demand cash instead.
The firm has managed to keep itself in positive limelight. On digesting the news flow, management commentary, numbers and business model over the last few months - it seems to me that this is a scene out of the con movie Hera Pheri.
Found this on another internet forum, posting it here since some questions were raised earlier on tax payments and cashflow statements, hope its useful. This is the company response to an investor’s query via email :
"Note on tax provision:
a) Income tax provided during the Financial year 2014-15 was Rs. 180.38 Crs. After making a payment of Rs. 115.87 Crs, the balance outstanding as on 31-3-2015 was Rs. 75.25 Crs. Subsequently this amount is paid. The detailed working is shown below.
Particulars (Rs in Crs) Provision for income tax opening balance (pl refer note no. 10 of page 101 of Annual report) = 10.74 Add: Income tax during the Financial year 2014-15 = 180.38 Less: paid /set off during the year = 115.87 Provision for income tax closing balance (pl refer note no. 10 of page 101 of Annual report) as on 31-3-15 = 75.25
b) Other provisions other than income tax shown under the head short term provisions (pl refer note no. 10 of page 101): Particulars (Rs in Crs) Opening Balance = 49.94 Less: paid during the year = 16.59 Closing Balance = 33.35
c) During the year we have Paid an amount of Rs. 115 .87 Crs towards income tax and Rs. 16.59 Crs towards other provisions. So the total amount paid towards short term provisions was Rs. 132.46 Crs. This amount of Rs.1,32,45,87,428/- is shown in consolidated cash flow statement for the year ended 31 March 2015 as line item as decrease in short term provisions (Please refer page no.93)"
@ANUP47, it is the US subsidiary (which was only an acquisition vehicle, has no significant operations - as per the company) which filed for bankruptcy protection, not the India parent.
What is effect for declaring bankruptcy under Chapter11? I studied the us law for bankruptcy. It restrict the responsibility of payment for acquisition done in 2010. Over all it is positive Move for lycos.Daum has to settle for agreed amount i.e. 36 million. For my point of view it is good move and will solve problem. invite for discussion if some body have good knowledge of legal procedure.
Promoter Suresh Reddy used this market reaction to increase his share - bought 2 lakh shares when stock fell by 20% and was locked in LC on 16th, thereby increasing his share by 0.67%. Promoter increasing share is generally considered good sign, correct?
IT is a good news. Promotor has taken advantage of situation. As such delivary rate is 57% of 51-52 lakshs quite high. It is good sign. I as holding tightly and will ad more of decline again.
In 2016, global advertising spending across all media will touch $538 billion, accounting for an year-on-year increase of 4.5%
Television continues to command the majority of market share with a steady 42.0% in 2015, and is predicted to grow by 3.1% this year
Digital media accounts for 27% of the total advertising spending in 2016 and will touch a predicted $161 billion or 29.3% of total ad spending in 2017
Powered by the growth of mobile at 37.9%, online video at 34.7% and social media at 29.8% in 2016, the strength of digital is expected to continue to grow at double-digit levels of 15.0% this year, and a further 13.6% in 2017
12 markets where digital has become the primary medium for ad spend - US, Germany, Taiwan and Austria are predicted to join this list in 2018.
India ad market growth is estimated at 12.0% in 2016 and 13.9% in 2017; TV is expected to remain dominant in India for many years to come, but advertisers are increasingly using online video as an invaluable complement. Share of total digital advertising spend in India is still relatively low at 8.9% for 2016
Good signs as far as the overall market is concerned - remains to be seen how much of the opportunity Lycos seizes.
In LYCOS case it’s less about business but more about management and their attitude towards Shareholders.
Look at the level of transparency internet companies i.e. Google, facebook, Verizon, Yahoo (in outside India) and Infoedge, Justdial (India), are working and loads of qualitative and quantitative information share with shareholders.
The management seems to be moving in the right direction and looking forward to increase transparency about latest happenings and developments in the company.
Lycos recently renewed the deal with Yahoo! Suresh Reddy is quite upbeat on this and he expects the revenues from Yahoo! alone could lead to a potential 10% increase for Lycos.
Lycos launches Brightcom subsidiary to focus on video, mobile ads. This looks a good move as mobile and videos advertising is surely going to be an area of growth.
The promoter has increased his stake in last quarter although the change is quite minimal. The promoters hold 39.10% stake at the end of the Mar quarter (vs 39.05% in Dec)
When international companies like Jawbone which were into wearables are exiting the business dominated by solid companies like Apple and Fitbit - how do you expect a company like Lycos with no USP/R&D to even see these fitness trackers?
Chinese mobile phone manufacturing giants don’t even touch this business for the same reason. A simple search on Aliexpress will reveal that these there are thousands of similar products. Why and how do you think that Lycos will win is this space?
It doesn’t matter if they will be able to do good in IOT or not, even they are exceptionally well in their core domain i.e. digital marketing. But we all know what’s the result at the end of the day.
So unless management is honest enough like that of Berkshier, Google, Facebook… even that of Indian peers like Info edge, Retail Investor will not be able to get return on their money in long term. And behavior of current management of Lycos shows all but honesty.
Lycos has declared a dividend of 5% along with full year results - will this give some comfort level to investors who were wary of the numbers so far? The Lycos acquisition dispute amount has also been agreed upon as per the press release, legal and financial formalities are being worked out. The domestic IT services business has also turned profitable this year.
