megazoo... I think it's only a matter of time before they break $5M or $6M or even $7M/qtr. I don't know when it will be though. That would be just a pure guess. I do know the tablet and handheld POS system will sweep retail. It's obvious----it allows you to build a database of information on your customers while combining brick-n-mortar with online sales. In all of this, inventory tracking is going to be essential. Does that mean everyone uses a bluetooth scanner with the system? I don't know that for certain. You can use an USB plug-in scanner with a Square Register but then you can't use it in the aisles or warehouse (whereas a bluetooth one can be carried everywhere). The other option is to put a scanner on your smartphone through an attachable case (the phone camera is too slow for multiple scans). Linea Pro did this + a credit card scanner and it all got started for use at Apple stores. People don't know this, but Apple actually approached Socket a few years ago (Socket has some great engineers that are well respected) to create this product for their store employees. Socket turned them down! They couldn't afford the risk (pretty much because the CEO kept too many employees on the payroll for too many years when they cashflow negative and they couldn't risk the money to do it). It's why they came out with the 8ci scanner last summer finally. Sales are growing with that product but it has a ways to go for me to be happy.
For them to get to $5M-$6M quickly, it will involve them getting large deals signed by their software partners. They keep saying they are out there. I honestly thought they would have had the 28K scanner Japanese deal (it's still in play). That alone would add almost $1M/qtr to revenue. With a profit margin of 43% plus and expenses rather fixed other than more warehouse workers, a lot of money would flow to the bottom line. At $7M/qtr, this is a serious cash cow of a little company. It's why I'm so pissed that the company couldn't make the Somo do better.
2013 Shareholder Meeting: Socket allows cumulating of shares (and can't change it until they get back on the Nasdaq again). That means instead of voting 1x for 7 different candidates, I can vote 7x for 1 candidate! I built a coalition of shareholders who held 525K shares who gave me legal permission to vote their shares in person and I put 3.7M shares towards our own candidate, Eric Fidel. No company candidate, through normal voting, had more than 2.1M. Trust me, the company did not like it. In the process on of the founders of the company, Michael Gifford, was kicked off. I later heard he was rather angry and, ironically, they let him go 6 months later. Eric actually worked well with the Board and he pushed them hard on keeping expenses low.
2014: I now communicate with around 1.2M shareholders. 850K or so I know could cumulate without question (this doesn't include you or bbotcs. Just major holders I know as times has gone by). The company knows this and it worried them. They actually liked Eric on the Board, but their plan was instead was to drop him (and replace him with Dave Dunlap their CFO), and, with the two retirements of other Board members (Kevin Jost, the former president of Honeywell's barcode division became a consultant instead) and drop the Board to just 5 people to limit how many I could cumulate against them (i.e. all the shares x just 5). Since we would have to use our shares to put Eric back on the Board, it reduced our ability to add more. They figured we would do it, but only be able to do him alone. Dunlap then would resign and Eric would take his spot. Complicated, eh?!?
Instead, I chose to not do anything. I knew revenues were going to inch up and the focus needed to be on presenting the company in a better light, not on a rogue group of shareholders making a public statement again. There was a bit of disagreement among our group, but Eric instead took a position as an "observer" which means he's at Board meetings but can't vote. As for voting, what we did instead is NOT vote! If you look at the results, no company director got more than 1.1M votes this year. It's the lowest voter participation ever for the company.
2015: Now there is a new worry for them. I can't get everyone to cumulate (some are partners in firms or have different agendas), but if you cumulated 850K shares--the number I'm sure I could get at minimum now (for 4.25M votes while also simultaneously getting others to not vote to keep the total tally down and then you spread that among 3 candidates, you could theoretically take over the Board). This assumes you have solid candidates to put up---not just anyone. Eric F. has a very strong resume. They all wanted me on there instead, but I have no desire.
I don't have a lot of faith in the CEO. I've met him (as have others). Good guy but not driven. Replacing him now isn't fiscally smart as it would cost too much money and their balance sheet isn't strong yet. Though a year from now?!? I'd love to see this a $200M market cap company and I don't know if he has the passion (or ability) to get it there. On the other hand, he has set them up well with the scanner niche they are in. If the partners do all the selling, maybe he's capable of just delivering scanners on time to them??
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