Thursday, July 08, 2004

FileNET gets hammered

I guess you saw yesterday that FileNET's shares got hammered pretty good, losing about 20% of their value following their pre-announcement of second quarter numbers that came in below analyst expecations. FileNET only missed its number of 5-7%, so we think they were harshly punished - which good open the door for an opportunistic buyer. Keep on eye on this over the next couple days.

Anyways with the ECM market as healthy as it appears, we still think FileNET's strong user base, reputation, and technology expertise make it strong company in the long run. CEO and Chairman Lee Roberts blamed sales that didn't close fast enough - which is the new common Wall Street excuse. I guess we could have seen this coming on account of the fact that 10% of FileNET's first quarter revenue came from one large deal and otherwise the company would have missed the 1Q numbers as well. Still the company remains profitable and has like $300 million in the bank. Next to Documentum and IBM, it's probably the third most attractive ECM company on the market.

Cheers.

Ralph

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