We mainly talk about public companies on seeking alpha, as it is possible to profit immediately from taking position based on one’s analysis of current events, business outlook changes and other corporate events or use the information for long term positioning in market. Nevertheless, I still thought about writing something on this small private company Arcana Networks (http://www.arcananetworks.com) as I am not sure how to use this kind of ‘alpha’. Any ideas are most welcomed.
While looking at the product suite of Arcana, I found that it is so directed towards Cisco’s (NASDAQ:CSCO) integrated service routers that you could see what kind of exit this company is preparing itself for. Arcana Networks is provider of network provisioning and monitoring solutions. Its products help deploy advance services such as unified communication and mobility mainly on Cisco devices although the architecture seems to be vendor agnostic and solutions could be used for other vendors. Arcana’s solution may not be technology changer but some sort of network management solution is required for any hardware network solution. If Arcana could make it to the solution bundle with Cisco's enterprise network products, it can enjoy good fortune whatever exit pans out: acquisition by Cisco or for that matter any other big network management products company. You may never expect an IPO from a company like Arcana, it being in a very small market space. However, its products are well positioned and fulfill the customer needs in a niche market; trade sale is always a possibility. Now the question that I have is “how to profit in this type of scenarios if you just want to take small positions?”
Disclosure: Long CSCO