Lycos Internet Ltd. (Ybrant Digital)

I have attached my research report on Lycos Internet below. Please have a look and express your views.
Lycos is a digital marketing co. With a huge growth potential because of the sector specific groth ,
Also there are various triggers like the nse listing,lycos overseas listing, expansion plans in India and China and the growth of digital marketing segment worldwide.
This report is moreover my sector specific views and is less of number grinding.
Co. Is available at low priced valuation on 4x pe.
Have a look!!

 

Nice research report. I did not know about this company. Stock is cheap. Who are competitors and what is the risk factors?

 

See there are competitors but the market size is huge and moreover lycos is trying to expand in various regions to make out of it as much as possible.risk factor is almost accompted at the current price . Still make your own opinion after studing the annual reports.

 

Thanks. I will carefully research further into stock.

 

dear brother,
I am watching lycos internet for investment. can you send me the report on lycos on parikh38@gmail.com

 

Digital marketing according to my simple view.
Any media decision let it be tv , radio or newspaper has been deriving its major source of revenue from advertisement.
A few days back I remember that a few ppl complained about the derth of advertisements in the newspapers during diwali times , to which the editor of economic times reported that if the advertisers weren't there then the cost of your newspaper would be rs 25-30,so instead of complaining we should be thanking the advertisers, he added.
Also, regarding the view that we still do not like the advertisements that are flashed between our favorite programmes but still this has been continuing since decades.
I my view any form of media will not be able to function or if function will not be able to maintain a reasonable price if advertisements are not present.
And seeing the present shift in digitalisation , I feel that digital advertisement is the next big thing.
Comments are invited for the same.

 

well said.. i m already into this stock. To add up they are also adding new divisions like health band i.e. lycos life and Internet of things which is expected to get released officially by next year though still available on amazon and is in beta version.. it is a billion dollar industry till 2020 and if company can even get few % of share based on its rebranding it can be game changer for the company and shareholders.

 

Of course it can be....

Also, the jv with Apollo can be a blockbuster as in my opinion fdi is manufacturing will also be accompanied with the fdi in startups in India and supporting them without any risk of their own can be a game changer.
Also a support from Apollo international lights upon the genuiness of this company.

 

Hidden RISK in LYCOS.

Lycos owe $36 million(approximately 250 CR) to Daum on Lycos DEAL. If you see Lycos balance sheet it has negligible amount in cash and bank. Majority of the money had been mentioned in "Work under progress". If they have to pay 250 CR then either they have to dilute the stake or take DEBT. Total Risk liabilities will be : 1. A debt of 250 CR 2. Fund raisers for recent acquired of bright com and mysms etc are through private investor. These private investors are on an urge of exit and Reddy himself told in an interview recently to mentioned that they will facilitate their exit. But he didnt mention that who will replace those investors and invest money. If they don't find any other investors then more debt need to be raised(equivalent to acquisition amount) 3. After the 250 CR daum impact they will need to Raise money for working capital under debt Seeing the above factors I would suggest to stay away from this stock until the information on "how are they planning to pay DAUM" and "who will invest money after the exit of private investors" is made public by Lycos management. If the above reasons are true then the stock will be available between 2-3 RS "Sudar Industries Ltd" also walked in the same path of Lycos. Study it to get more clarity on what Lycos will become.

 

Good write up looks like a dangerous stock. Better go for good companies with good business model low debt, high roe and management like jb Chen, dhfl

 

The issue with Lycos is solved and now I believe the share is ready to move up.

The stock price were beaten down because of a court case Ybrant digital(parent company) was fighting with the rival company DAUM.

What was the issue - Ybrant(parent company) bought Lycos from Daum with 20 million dollars down payment and rest of the payment would be some X times the revenue. So the pending payment came out to be 36 million dollars.

Lycos refused to pay this amount on the grounds of manipulation of revenues by DAUM appointed Lycos CEO and hence files a court case.

They lost the case and court ordered to pay 36 million dollars to DAUM. Ybrant files bankruptcy to get time to file a counter case on DAUM.

Later bankruptcy court asked Ybrant and Daum to settle the case outside the court and moved Ybrant out of bankruptcy.

Then the US court appointed a sheriff to get the transaction done.

But Lycos Contributed only 1.2% to the overall profit and 5.6% to the net asset of Ybrant. So paying 250 Cr (36 million dollars) was a bad deal for Ybrant as well as the investors.

Finally court ordered Ybrant to hand over the share of Lycos it owned(56%) to DAUM.

So now the company has been renamed as Brightcom, which is their signature brand.

This court case was the reason of fear to beat down the share prices to Rs 5-6 and now this issue is solved the share price has a good chance to reach its intrinsic value of 60 Rs – 70 Rs at 10 PE.


“Comments and other perspectives are welcome”