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Cisco Needs To Think Like Zuckerberg And Buy Ubiquiti Networks
Feb. 27, 2014 8:02 AM ET
Cisco Systems (CSCO), a company with already over 44 billion in cash, opted to sell eight billion dollars' worth of bonds recently. Frankly, I feel it is a wise business decision for any company close to the size of CSCO to take on debt while it is so cheap to do so. It would, however, be even more shrewd of Cisco to use the new funds to attempt a buy-out of Ubiquiti Networks (UBNT).
To take this idea even further, soon-to-be retired Cisco Chief Executive Officer John Chambers should offer Ubiquiti Networks Founder and CEO Robert J. Pera, a Board of Directors seat and groom him, over the coming year, as the new CEO of Cisco Systems.
It may sound far-fetched to some who are unaware but it is time for the masses to realize that Pera's performance as CEO of UBNT was perhaps the strongest of any company on Wall Street in 2013. Thus, it was certainly not by accident that UBNT was the fifth best overall performing stock of 2013.
This is my first authored Seeking Alpha article in more than a year and only my third overall. I was certainly scrutinized (read comments) when I suggested that Pandora was going to be a $56 dollar stock in my November 2012 article at a time when Pandora (P) was selling at a mere $7 handle. I only own four stocks presently including P and UBNT. I built my position in UBNT between March-June of 2013. It was the hiring of Craig Foster as CFO which I felt gave Ubiquiti the needed credibility for me to pull the trigger and become an investor. I sold some of my UBNT shares last month to buy Evertec Inc. (EVTC) which is the only company I intend to purchase in 2014 (perhaps another article for another day). I still, however, hold a sizable long position in UBNT. And while I see Cisco's need to acquire Ubiquiti as an essential priority to their future business prospects, as a UBNT shareholder I have my misgivings.
Ubiquiti Networks excels at something that Cisco has been lacking for too long...fresh innovation. Ubiquiti has consistently rolled out high quality wireless products that satisfy users at price-points that confound rivals. Its UniFi line of enterprise wi-fi is enjoying juggernaut sales growth that only Cisco outsells in volume. Pera predicted during his August 2013 earnings conference call that UniFi will surpass Cisco in volume sales in the next 12-24 months. Analysis of Gartner research would support this claim if the current trajectory continues. And while Cisco continues to disappoint its investors with sluggish growth, Ubiquiti has beaten and raised estimates for four straight quarters following a positive resolution to the product counterfeiting issues they endured during 2012. Moreover, Ubiquiti Networks has established a business model that is an example of their "out of the box" thinking. It has allowed them to keep their strong growth spurt in-tact while other rivals like Aruba Networks (ARUN) and Ruckess Wireless (RKUS) have simultaneously floundered. Ubiquiti is a lean, sub-200 employee company with no sales staff. Even their means of customer service is cutting edge with an effective community board designed to provide rapid-fire troubleshooting answers to customers in need (and who doesn't require their problems solved immediately?).
I won't overload this article with the Ubiquiti Networks financial metrics. I would advise anyone interested to seek out the terrific writings of fellow Seeking Alpha author Matthew Dow. Matthew, for some time, has been writing about UBNT and their eye-bulging key statistics (plus, you'll often notice my comments below his UBNT articles of the past 10 months or so). I feel Matthew has done a better job following this company than any of the analysts whose job it is to do so.
The eight billion dollar CSCO bond sale would hypothetically amount to a $91 per share UBNT offer. My guess is that Pera, who owns 2/3rds of his company, would rebuff (as would I). However, a $120 per share offer would seem fair and would provide Cisco with a young, sage and hungry leader that would give them what Facebook gained when purchasing What'sApp for 19 billion dollars: An assurance to Cisco stakeholders that the company is seeing around the corner and is positioning itself with the tools necessary to continue being a dominant force in its industry.
So what has caused the drop -- this stock was at 50 not too long ago
vibes and feelings
Chart read call ???
new play at 42.80
massive from $41 to 51 in a few weeks. like the reload plays. freeeebieeeeeees
tdy's 45.61 - good level starting 2014
ok back in da track @43
This should have a nice bounce as long as there's no overall pullback or bubble pop.
what the heck!! raped! minus 10per cent to 38.90 waterfall bashingzzz! reason? nasdaq bubble??!
$UBNT solid $43
to all newbies don't wanna wait for a possiblx mid30 dip: 'round 40 (+/- $1,50) seems to be a good entry point. next ER has bombastic potential, the whole sector is growing quick!
alternatively $RKUS will be also on the winnerside on the midterm/long haul....impo
First Quarter Financial Highlights
Revenues of $129.7 million, up 111% year-over-year and an increase of 28% from the prior quarter, marking the fourth consecutive quarter of sequential double-digit revenue growth.
GAAP net income was $40.5 million, up 208% year-over-year and an increase of 41% sequentially.
Non-GAAP operating profitability of $47.1 million, up 186% year-over-year and an increase of 37% sequentially.
GAAP Diluted EPS of $0.45, up 221% year-over-year and non-GAAP diluted EPS of $0.46.
Average DSOs declined to 25 days, a record for the Company.
$51.9 million in net cash provided by operating activities.
First Quarter Business Highlights
Service Provider Technology:
Extended technology leadership in the fixed wireless broadband market through the introduction of next-generation airMAX®, airFiber™ and EdgeMAX™ products.
Sponsored research conducted by IDC on the market opportunity for fixed wireless access that showed fixed wireless connections growing at a 21.8% CAGR through 2017 and a $10 billion revenue opportunity for wireless Internet service providers (WISPs) by 2017.
Announced the Ubiquiti World Network (beta), a global alliance of WISPs to foster market awareness and market growth. Over 1000 WISPs have signed up since the announcement on October 16.
Enterprise Technology:
Announced that the Company shipped its one millionth UniFi™ access point since entering the enterprise WLAN market in 2011.
Announced two additions to the UniFi product line, including the industry's first 802.11ac outdoor AP.
Achieved the highest market share gain in enterprise WLAN coordinated access points for calendar Q2, according to market research firm Gartner.
Attained legal victory against counterfeiter of Ubiquiti products in China.
"Ubiquiti is continuing to demonstrate the financial leverage, scalability and disruptive power of our business model," said Robert J. Pera, Founder, Chief Executive Officer and Executive Chairman of Ubiquiti Networks. "With our strong pipeline of innovative products, growing traction in the enterprise business and improving execution we believe that we are well positioned for future growth."
....READ more on 8-K
ho hoh ho +20% $44 weeeeeeeeee
we live in volatile times, but ubiquiti is solid like a rock! or like a
missile? lol
smacking $40 again, blue skies ahead ! ! !
loaded @37.90
thx for Info. @43 weeee
This is the first post on the Ubiquiti World Network in the Ubiquiti community forum.
Ubiquiti World Network by UBNT-Matt yesterday - last edited yesterday by UBNT-Jamie.
Hi, my name is JT and I've been asked to write about the announcement of the Ubiquiti World Network.
Before I get into the details, I want to talk about our competition. As you know, the Wireless ISP industry goes up against the phone and cable companies everyday. It might seem daunting because they are so established but I see tremendous opportunity. DSL is pretty much unusable for today’s internet needs. Modern websites are very visual, online gaming is at an all time high, and families stream YouTube or Netflix to multiple devices in the home. The cable companies have the lowest customer satisfaction of any industry in the United States; It’s below 30%! It’s unbelievable, and they get away with it because they know our customers don’t have any other choice.
You and I know better. The WISPs have been a solid option for quite some time now. This is not an issue of quality.I’d argue that our service is just as good or better. This is an awareness issue. When people move into new homes and offices, they don’t know that they have another option for Internet. When businesses put together their internet plans, the WISPs are not at the table. We are the last resort after the phone and cable companies fail. More often than not, we get the job done.
Today, we begin our journey to make ourselves heard. Today, we launch the BETA for the Ubiquiti World Network; an alliance of individual WISPs working towards a single vision that leverage an unified technology platform, sales and marketing assets, advertising, and political clout.
We’ve been testing the ideas behind this project for the last year. We’ve ran a series of pilot tests examining enterprise, urban, and rural markets. The results were very exciting. With no targeting, no optimization , no advertising air cover. We were able to increase leads dramatically.
In one test for Wisper Wireless Internet, we were able to see a 760% increase in leads compared to when they did no advertising and a 330% increase in leads compared to when they did. These are dramatic numbers
With the launch of the Ubiquiti World Network, we plan to expand upon that test by offering WISPs across the country a suite of assets and tools for to grow their businesses. The program includes:
A marketing library where we will hold the collective knowledge of the union. Pull case studies, spec sheets, and other sales collateral to help you get into and close deals that were previously out of your reach.
A lobbying initiative leveraging our legal resources to address the concerns of today so that we can secure the future of the wireless ISP industry.
An advertising program that we’re investing millions to make the nation aware of our existence and our excellence. We launch the campaign in early January 2014.
And a website to house these new initiatives and to provide a sales engine for our future customers. Customers would simply go to the website, type in their address and get matched with a WISP or WISPs serving that area.
You remember Wisper's numbers right? Now imagine those numbers with the full vision of the Ubiquiti World Network behind it.
All of these tools and assets are available to our WISP partners at no cost. There are no commitments and you invest to build your name–Our goal is to grow the Wireless ISP industry. As it grows, we hope to as well.
We are announcing the BETA for the Ubiquiti World Network today to give everyone time to prepare for the January, 2014 national launch. WISPs who enroll will have three months to think about how to expand their network, their staff, and where and how much they want to advertise.
The party was great. I watched it on youtube and I recommend you watch it too. Just start with Pera's presentation at 32 minutes into the video.
Ubiquity - Youtube
If you don't want to watch the whole thing - here is the commercial they played at the "party." The plan is to increase awareness and this should drive sales.
Commerical
Two parts to Pera's presentation - 1) Launch of Ubiquiti World Network and 2) New products
Ubiquiti World Network is a plan to increase awareness of WISPs (Wireless Internet Service Providers) as an option to high speed internet access instead of cable and the phone companies. They plan an advertising blitz on TV to increase awareness and have designed other advertising media for individual WISPs to customize - direct mail, bill boards, yard signs, etc. By helping individual WISPs, they should greatly increase UBNT sales as well.
3 New products which should help WISPs:
1) Airfiber5 (unlicensed 5 GHz , gigabit speed backhaul), with a range of 100km.
2) Airprism - active RF Filtering (Multi-Lane RF Technology)
3) The NanoBeam (redesign of NanoBridge with active RF filtering and redesigned mounting).
Overall, the conference has gotten me excited that UBNT can continue to grow and grow fast.
lets smack 41. clear sky ahead ^^^
must have been a great party yesterday the wall of $40 is getting smashed!
Can't make it either. But I hope the announcements live up to the hype.
tonite in Vegas? geshhhhh, can't make it! will you go there?
meanwhile pps can't smack the wall of $40 but will break soon I guess
UBNT continues to generate buzz and profits. I am looking forward to their earnings release in early November. Then there is this WISPAPALOOZA presentation by Robert Pera which looks to be very interesting.
WISPAPALOOZA - UBNT - link
Live Launch Party
October 16th, 8pm PT
at the South Point Hotel in Las Vegas
Join us in Las Vegas and celebrate our most important announcements of the year. We will start promptly at 8PM with CEO Robert Pera on stage to deliver the news and party afterwards with food and drinks for all.
@ $39.16 and still strongggggg
$UBNT first quarter 2014 financial results will be released on November 7, 2013.
luvin this stock...plus $RKUS in that segment
from 26 to 34 within 2 weeks is really nice controlled upmovement without red RSI. nice OBVx21, some big guy does steady accumulation here without causing public attention. still holding!
Nice...it broke the resistance level from the other day and it's been great trading with today's breakout above $10.75...till next time.
Slow and steady climb :)
You completely missed the bottom, you will never see the $7,s, not even $8's.
Decision point...resistance or breakout time.
I may miss the bottom, but I'll wait to the low 7's or lower. Doesn't seem like there is a lot of confidence in current financing plan.
I think it's way oversold, however, I'm not a timer, but I think by Sep options expiration date we should be at $10.00 plus or less than $7.00...we shall see.
I'm new to this stock. I would agree based on my preliminary DD that this is significantly oversold, but what is your opinion of how low might it go before gaining traction.
Agreed, waaaay oversold - they will get the counterfeit issues handled.
I read the transcript and I like what I seen, I believe they will kill the estimates for the first quarter as their business continues to expand even with the counterfeit products!!!
Monday should be awesome, seen buy orders come in at 75,000 shares toward EOD. I'm loaded for $12+ EOW!!!!!!!!! GLTA
Should definately be good
for a buck or two a share over the next couple of weeks.. GL
I'm gonna carry through next week, We should see some upward movement in Aftermarket, + they are buying back shares...
Another example of Market
Overreaction.. This is one I will flip and def hold some long..
They Had a great Quarter also!!!!!!!!!!
Still call for $20 Range
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