About a month ago, I posted (here) on applying value investing principles in enterprise SaaS. In that post, I highlighted Click Software (CKSW) as an example of a stock that might provide hidden value: companies moving from enterprise licenses to SaaS subscriptions often suffer during the transition.
Click Software is making the transition to the cloud in the fast-growing mobile workforce management market (think TOA and ServiceMax). My hope was that this micro-cap, Israeli company would some day be recognized as having a foothold in a very hot market.
I am pleased to say, for once, my prayers were answered. Two weeks ago, and just five weeks after my post, Click Software announced that Francisco Partners planned to take Click Software private in a transaction valued at $12.65 per share in cash. At the time of my post, the stock was selling for $8.95. Any of you foolish enough to trade on the basis of my rants made nice, highly taxable short-term gains. My “call” on Click Software definitively proves that even a blind squirrel occasionally finds a nut!
I am pleased to tell you that at the time of announcement George Soros and I owned almost 10% of Click Software. Here is my accounting of our exact positions:
- George Soros: 3,130,000 shares (9.4%)
- Bob Solomon: 1,000 shares (0.003%)
- Total Soros/Solomon: 3,131,100 (9.4003%)
Key lesson: one does not become a billionaire by placing $8000 bets.
More “Go Privates”?
If you are looking for other possible “go private” transactions in the enterprise SaaS space, take a look at my blog post here. I identified Covisint (COVS), Liquidity Services (LQDT), and Sciquest (SQI) as other possible candidates for such transactions. (I own none of them right now, but am tempted.)
My next post will be about another interesting public enterprise network stock that has run up, but might still be an interesting investment.
(A note to readers: I am not trying to become an investment blog. I write about public companies because I can– they are public! Most of my clients are private and I do not write about markets or companies I am currently working with.)