I tagged the top management and did repeated follow ups via email. However, I have not received any communication for a simple query. This was my first attempt to get answer from a listed entity and maybe this is nothing unusual. I am letting it go now but if someone decides to join the next concall please ask this question. Thanks!
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Zaggle has decided to purchase the assets from Dice for 68 Cr rather than acquiring entire shareholding for 123 Cr (as stated before).
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Zaggle seems to have renegotiated the deal with the meltdown in stock prices. This is a significant reduction in the value of dice. This has come at a cost of a huge time lapse. Hope they can quickly close the deal now and begin the integration process. Dice was the most strategic of all the deals they had done. It related directly to their core business.
The management now needs to clearly explain the benefits and the strategic outcome of this deal. Maybe they will do it on closure. Also, they need to wrap up other acquisition on the pipeline and put the money to use. As markets improve valuations will climb up.
Has anyone calculated or estimated the incremental revenue potential of Save with the changes in income tax rules? Would love to hear on this.
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On the face of it, looks like a significant reduction in the value of Dice. But have to keep in mind that the initial INR 123 Cr was for the company as a whole, which included the employee base of Dice that had built the platform from scratch (180 employees as per LinkedIn, including 60+ in engineering). Zaggle does have brand presence with which they can upsell DICE capabilities, but from what Iâve heard, DICEâs products appear to have greater depth than Zoyer or Save. If Zaggleâs team is able to handle this acquisition smoothly and continue running the product effectively, then it could turn out to be a strong move.
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no offence but itâs been the same narrative for every acquisition they made.. the only change this time is that the stock price seems to have knocked some sense into the mgmt - theyâve restrained from spending nonsensical amounts- at least on the face of it.
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Honestly, this fits the theme of âdo more with less employeesâ. Zaggle spoke about cutting its headcount as AI is a beneficiary in making products faster and cheaper. Effiasoft probably was something that Zaggle realized it could do in house anyway and for Dice, maybe they just wanted the IP rather than the whole company with the employee base. Fits the theme of do more with less and its good that they are being proactive about the current state of themes.
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Why are folks believing that employees will not be taken? I believe majority of employees will be taken. You donât buy just IPR or assets of a working company. People are the real value, without which this acquisition will be meaningless. Assets only deal happen typical a plant is already shut down.
The existing customers need support. Sales people are needed to attend to deals in the pipeline. Dev team is needed to keep delivering customer functionality requirement. If they have a superior product, no way the developers will be let go.
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Headline numbers show strong growth. But CFO is still negative.
Also, they have capitalized 107 Cr expense which is mainly manpower cost!
If we expense that out from P&L, the CFO is terribly negative.
Not able to understand whatâs going on in Zaggle.
Discl. Exited today.
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They have no CTO. They hire cheap engineers from local colleges and pay consultants to tell them what to do.
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While Q4FY26 revenue growth looked solid, the stock tanked significantly post result indicating that market is not buying Managementâs guidance. Company needs to win Marketâs trust by delivering strong performance in-line or ahead of guidance for the next 2-3 quarters at least.
Exited with a loss!
I own zaggle has 10% of invested amount in zaggle and still holding it. Few reflections
It will not be a cash flow machine like IT companies.
Significant build up of intangible assets seem bit risky. This is where you do PnL management and without development work you canât stay relevant in the market. So itâs just double edged sword.
If management has to slow down propel points segment then cash flow should improve, but for that management needs intellectual honesty to say itâs better to run a smaller and better company than a bulky and bad company. Do they have this intellectual honesty or will pounding by market give them necessary push to change I donât know.
During call I felt management was somewhat ready to slowdown the growth which will improve cash flows. Thereâs some although very little acceptance on the part of management that things are not so good with current business model of the company.
Will management bring some positive change I donât know. Even if they bring it will take a year at least to start showing in the numbers. So itâs long and painful wait.
Why I am holding zaggle is because five years ago they had just propel points business. Now they have spend management in the form of save and zoyer. They created payment business using existing business and they have done well with Greenedge and Mobileware acquisitions. Yes taxsapnner acquisition is just a failure. But itâs part and parcel if you are buying things. Because of this ability to create new businesses and doing value accretive acquisitions, I am ready to bear the pain for a year or two.
Letâs see how future pans out.
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IN CNBC video, in last few minutes Raj mentions that promoter will buy shares post 18th May (once trading window opens)
Will they buy or buy it was just promotional drama?
Will they buy token quantities or are they going to buy large quantities?
Letâs see what they do.
Imo if they have to advertise that they are going to buy it means all is not well. Why announce if they are confident about the results and the business as a whole.
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Not a massive red flag, but I dont like that the management is that focused on the stock price. I also do not want the stock price to be a reason for them to change their strategy just to keep investors happy. Their main objective should be growing this company greatly and if revenue growth at the cost of immediate margins benefit is the way to do it, get it done!
After all they know their company best and they know the industry âŚ. companies like Ramp are massive while incurring losses for growth. I hope the management has not changed their direction and put the long term ambition of $1B revenue at risk to cater to investors who want OCF ( This was not too much of a concern to me as the company does not have any liquidity issues).
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Promoter did buy 100,000 shares on 18th May. Its a good beginning. Let see if he keeps on buying as suggested by him
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As per my understanding zaggle has 7.5 crore free float shares out of which they bought 1 lakh shares (worth 2 crores) making it 0.07% purchase. Frankly, if the motive is to signal confidence then I am feeling rather nervous with their actions. Honestly, they need to buy at least 1% to move the needle. Many people objected here when I used the word âfraudâ out of frustration. I agree, the correct word here is âtimidâ.
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Agreed.
If he didnât buy 1% then itâs not a signal of confidence then it will make us investors nervous.