Seeking Alpha

Mighty_Mouse's  Instablog

Send Message
No thanks
View Mighty_Mouse's Instablogs on:
  • GlobalSCAPE In-Step With New Computer Security Laws
    Massachusetts' New Database Security Law Now In Effect

    Massachusetts Data Privacy Law 201 CMR 17 is now in effect as of March 1, 2010. The measure mandates not reporting procedures but preventative measures to prevent system breaches from occurring at all.

    The law was enacted to make sure companies put in place a security policy and guidelines on how to use that policy to protect databased information. See Ericka Chickowski's article in Dark Reading for more on this Massachusetts law at 

    Muti-billion dollar international IT firms and industry-specific firms have been watching the developments in state-mandated mandates. See Greg Hoffer's blog post on this at

    In this writer's opinion, expect to see more state statutes affecting every area of computer system security and also expect to see the specific IT firms involved keeping abreast of of it and working with those firms who are top of the situation and prepared. As such, Globalscape is clearly one of the firms that has been well aware of the political climate in Massachusetts for several years and actually acquired Availl, formerly headquartered in Andover, MA. The company's enhancement of their EFT Server and their move into application whitelisting places them in a strong position in this area both to serve computer security needs of customers, such as Advanced Micro Devices (NYSE: AMD), IBM (NYSE: IBM), and Microsoft (NasdaqGS: MSFT), and to serve as a complementary business partner in the area of secure data endpoint to endpoint, or total path security.

    As the new vision of GlobalSCAPE has unfolded, it is becoming very apparent they foresaw these changes coming and prepared for it well in advance.

    Disclosure: Long GSB
    Mar 09 12:31 AM | Link | Comment!
  • Globalscape & Investing Psychology 747: A Poker Tell

    Okay. Psychology 747

    Globalscape is letting top level investors at institutions, banks, brokerages et al know about their stock and the company behind it ... getting the word out. Since it's a real company drawing the finest talent from the IT sector and not a fraud fly-by-night outfit, they are going to want to establish a relationship with these investors, not just go populate the marketplace with ads to buy buy buy GSB. In order to have a real relationship, the investors are going to have to trust Globalscape. They are going to look it over with a fine tooth comb to see if there is any indication they are being lied to or if any claims are being exagerrated, and Globalscape for its part is going to be sticking with the facts and not getting outlandish on their claims. They understand that just as with business partners, private investors insist on honesty and integrity from them. It's Business 101 that you want to not only meet but exceed the expectations of others. Hence, Globalscape has gotten into the mode of hardly giving out anything that could in any way possible be construed as forward guidance, not because they don't really expect the numbers to come in, but because if those numbers did NOT come in, it could damage relations within the investment community and them. Simple enough.

    So why write about something that seems so simple to understand. Well, everything is simple once we've thought of it. Application whitelisting is incredibly simple ... but you didn't think of THAT, did you? Oftentimes, that's all genius is is putting together things that should be obvious into a context that makes sense. With that in mind, I want to share a very good reason why I believe we are going to see strong financial figures in the 4th quarter and this Q1 of 2010.

    If you'll visit and find the Events link, you'll find that on March 1st is a presentation Jim Morris made to Americas Growth Capital, a firm we know Globalscape has had a relationship with for a long time, just like the relationship I referred to above. Is that it? No. Hold on. Read on. While at this conference with AGC, Globalscape was only presenting what it felt would engender a growing relationship of trust and expectations about its future and its current prospects. They weren't out there to get wide-eyed, emotional and hysterical about anything. Everything was down to earth; this was a very pragmatic bunch; they've seen the stock go up and down and sideways; they are going to view things with a critical eye and a long memory. If anything is said March 1st that doesn't pan out, they are gonna know it right away because they've got it down in their memory banks.

    So what's the point. Cut to the chase. Okay, now that we have the proper context to understand the intricacies of the ACG meeting, let's do just that. Cute to the chase. I indicated above Globalscape wasn't going to say ANYthing that would, after earnings release later this month, hurt, smear or tarnish their relationship with ACG. We all heard Jim at RSA mention a phrase he uses often in pitching Globalscape products, that they keep corporations from "tarnishing the logo" through a security breach. So obviously Globalscape isn't going to say something in the meeting that would one month later, three months later, clearly tarnish their logo and put a bad word out EVERYwhere that you want to avoid this company.

    So if that is the case, then, let's look at one simple statement from the ACG presentation that, if it is NOT true, is going to tarnish the Globalscape logo for a long, long time with the investment community. Do you know what that is? Did you figure it out last week or yesterday already? Good for you. But 99.5% of us haven't gotten there until today. Simple as this is or seems. And tah dah, here is that simple statement that if untrue is going to smear and tarnish the Globalscape image with ACG and California investors for YEARS to come:

    "Sustained, strong financial performance"

    That's it? You bet it is! If they don't have that, if they don't show that, after going out to California and tooting their horns about "sustained, strong financial performance", their future in the California investment community is done for and finished. NOBODY in their right minds will want to invest in it. Double-talking and leading people on is one of the unpardonable sins in investing.

    So what do you think? The ball is now in YOUR court. Do you think Globalscape is spinning a tall tale to somehow gain extremely short-term approval (which hasn't turned into any goldrush for shares, by the way) that they could somehow profit maliciously by? Or do you think they are a credible firm that's aware of all these things I wrote and just stating the plain truth to ACG last week? I'm in the camp that says Globalscape is not making a blatant, egregious false statement, but a very true one. That's what I MYSELF see on page 3 of the presentation. And that's the context I view it in. I see the 'tell', just like in poker, that they are going to show their 4th quarter hand with "sustained, strong financial performance". They haven't fudged or hedged in any of their presentations as if the 4th quarter wasn't that good, but now that we're in the first quarter, we're beginning to see a pickup. Nothing like that. Straight out it's "sustained, strong financial performance"... period.

    My conclusion:
    Globalscape is experiencing sustained, strong financial performance and we will see this verified and validated in the upcoming SEC annual filing they make. And that's a winning hand in my book and in my opinion!

    Disclosure: Long GSB
    Mar 08 2:12 PM | Link | Comment!
  • GlobalSCAPE: A Growth Story

    In 2007, Globalscape was riding high with 67% growth in revenues over the previous year and its stock, which had been around $3.00 to $3.50 began to move in-sync with its growth rate up to the $6.00 level. It even reached higher levels for a short period ($7.71 intraday on Oct 22, 2007). However, the worldwide economic disaster lay at the door, and their growth rate did not continue at 67%. Indeed, it didn't continue at 50%, 25% or even 10%, and instead actually went into negative territory down to -15%. That's a change of negative 122% percent in the growth rate when that rate fell backwards 82 points to -15% in 2008!

    The stock followed suit and dropped just as dramatically over 2008, losing 82-89% of its Oct 22, 2007 close of $7.44. So far, from the full annual data we have then, the stock appears to have followed its growth rate up and down. It is also noteworthy that each of the last two full years we have data for the stock went beyond its growth rate percentage, rising more than 67% in 2007 and dropping more than 82% in 2008. The verdict is still out for 2009 since the 4th quarter 2009's annual report is not due out till later this month.

    Will we see growth in Q4 2009? Better still, will there be growth in 2010? While attending the Association for Corporate Growth this past week at Frost Bank in San Antonio, Texas, Jim Morris, Globalscape CEO & President stated that they were expecting to grow top line numbers in 2010 with a range of approximately 25-50%. They've just recently added major partners, including one very large San Antonio company, RackSpace, NYSE: RAX, whereby GlobalSCAPE will be reselling their hosting service. You're hearing this in the press for the first time here. It's about time these two San Antonio firms joined hands in partnership as a match made in heaven for CuteFTP founder and this top-tier web hosting company.

    Globalscape also this week announced a major partnership with Advanced Micro Devices, NYSE: AMD, and that AMD selected GlobalSCAPE’s Enhanced File Transfer (NYSE:EFT) Server™ and CuteFTP Pro® in late 2009. As I write AMD is planning to deploy multiple instances of GlobalSCAPE solutions throughout its IT infrastructure. Said Richard Crawford, AMD IT Networking, "We plan to deploy GlobalSCAPE throughout our global enterprise to reap the benefits of file transfer management, with complete auditing capabilities and governance." How good is this product? Network Products Guide this March has named it winner of the 2010 Product Innovation Awards for Managed File Transfer (NYSE:MFT) stating "No other managed file transfer product provides an equivalent level of compatibility with industry standards and support for regulatory compliance mandates!"

    AMD is currently a $5.5 Billion market cap company; RackSpace is currently a $2.44 Billion market cap firm. With more partners, clients, channel partners in the wings, positive top line growth appears to be the ticket in 2010. Additionally, GlobalSCAPE will become a worldwide reseller of BOUNCER by CoreTrace ™, the most tamper-proof and automated application whitelisting solution in the industry, according to GlobalSCAPE sources; GlobalSCAPE announced a $2.3 million investment in privately-held CoreTrace of Austin, obtaining a seat on the board in the process, back on January 11 of this year.

    If the past is any indicator of how the stock will perform, then GSB is going to more than follow its growth rate up, in my opinion. The company is GROWing UP!
    Disclosure: Long GSB

    Mar 01 5:57 PM | Link | Comment!
Full index of posts »
Latest Followers
Posts by Themes
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.