Wednesday, 3 October 2007


I bought a pretty minimal stake in Blinkx back at their May 07 IPO for two irrational reasons.

1 - I rate Mike Lynch (Autonomy's founder). Indeed, he's very involved in the Prince's Trust like me.

2 - I believe that video search will be a hot topic as people use the internet for all kinds of video-related activities - from home videos to Youtube to Video on Demand.

What I didn't do was look at any of the fundamentals. I.e. like whether Blinkx at its IPO price of 45p was actually worth £125m. Afterall it had minimal (c£1m rev) and profits were not expected until 2011. When trading opened, the share price went through the roof. But this was all on a 'technicality' as institutional investors in Autonomy who were given one Blinkx share for each Autonomy share, apparently sold their Blinkx shares on the first day of trading without realising that they didn't actually own them at that time. They had to frantically buy them in the open market to balance the books causing the share price to almost double. It, of course, fell back once they received their allocations and they sold. You do have to wonder at the intelligence of those that manage our hard earned savings if they make simple blunders like this!

Then I saw my Blinkx shares crash from 45p to under 30p.

Anyway, Blinkx came out yesterday with maiden interims at the top end of expectations. Still just £1.2m rev in the six months! But this was enough to boost the shares by 15% to 34p. "Our markets are growing extremely rapidly as online television becomes an integral part of daily life" said Suranga Chandratillake - the 29 year old CEO of Blinx.

Blinkx are in the 'gambling' section of Holway's portfolio. Bluntly I think someone (eg Google) will take them out ...soon. If that happens, it would be at a considerable premium to the IPO price. Conversely, if that doesn't happen, I won't be forced to sell the house.

1 comment:

alan pelz-sharpe said...

Interesting as I think I was one of the very first analysts to write about Blinx in an Ovum snapshot some years back - hence this caught my eye :-)
I was impressed by the management team at Blinkx when I met them and the technology itself was smart - however at that point it was positioned as a Google killer (a bad idea even then) - my advice to them was to position into mobile and rich media - I have not followed them since leaving Ovum.

However of the search vendors out there - they seem to be one with a differentiated chance, though not sure that Autonomy is the best parent for them - as the consumer and enterprise worlds are so very different.


CMS Watch