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M c I n t i r e I n v e s t m e n t I n s t i t u t e1
McIntire Investment InstituteAt the University of Virginia
Jive Software Nasdaq: JIVE
Prepared by Harrison DiGia| 25 September 2012
M c I n t i r e I n v e s t m e n t I n s t i t u t e
Agenda
– Business Description– Stock Information– Thesis Points– Misperceptions– Risks or Signs That May Indicate We’re Wrong– Trends to Monitor – Final Recommendation
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M c I n t i r e I n v e s t m e n t I n s t i t u t e
What this Means
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• Leading provider of software for social business collaboration
• Offers myriad of solutions and platforms to aid in business development
• Currently serves over 667 enterprise customers with over 20 million unique users
• Headquartered in Palo Alto, CA
Business Description
M c I n t i r e I n v e s t m e n t I n s t i t u t e4
Jive ProductsJive for Teams Social Intranet
Social Customer Service Social Marketing & Sales
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Jive App Experiences
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New Position Decisions
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• Price: $15.05• Market Cap: 937.33M• EPS: ($0.68)• 52-Week Range: $13.50 - $28.15• IPO on 12/13/11 selling 13.4 million shares at
$12 per share
Stock Information
M c I n t i r e I n v e s t m e n t I n s t i t u t e
For Future Presentations
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• Best social enterprise platform on the market• Enterprise social is a sticky industry • Experienced and cohesive management team
with clear company vision• Buyout possibility
Thesis Points
M c I n t i r e I n v e s t m e n t I n s t i t u t e
• Jive increased its market share to 8.5% in 2011 from 6.9% in 2010
• 38% revenue growth is 10% points above industry average
• Significantly reduce information technology costs
• Users describe the platform as very intuitive, requires very little training, and increases the speed of collaboration
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Best social enterprise platform on the market
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Source: The Forrester Wave: Enterprise Social Platforms Report (2011)
Jive is the leader in current product offerings and future strategy
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• As more companies adopt social enterprise, Jive’s products should become easier to sell
• Deals regularly exceed $500,000 in size • 85% of revenues from subscriptions with 12 to
36 month contracts• 90% renewal rate, 110% including upsell• TryJive – 30 day free trial
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Enterprise social is a sticky industry
M c I n t i r e I n v e s t m e n t I n s t i t u t e
• Founded in 2001• 7 out of 13 members of Jive’s management team
have worked together before at Mercury Interactive
• Mercury Interactive sold to HP for an enterprise value of $4.4 billion
• Hiring of Jay Larson as President of World Wide Field Operations
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Experienced and cohesive management team with clear company vision
M c I n t i r e I n v e s t m e n t I n s t i t u t e
• Microsoft acquired Yammer for $1.2 billion in cash
• Stock rose 25% after rumors about MSFT’s Yammer acquisition was made public
• Analysts believe takeover price is somewhere between $21-24 range
• IBM and SAP are most likely acquirers
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Buyout possibility
M c I n t i r e I n v e s t m e n t I n s t i t u t e
Misperception
• Negative earnings • Underestimated growth of social enterprise • Many consider a short thesis
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Misperception
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Value Investing Conference
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• Longer sales cycle• Jive fails to innovate• Longer than expected road to profitability
Risks/Signs That May Indicate We’re Wrong
M c I n t i r e I n v e s t m e n t I n s t i t u t e
MII Website
• Quarterly earnings reports• Customer satisfaction with Jive’s platforms and
solutions• New customer additions
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Trends to Monitor
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• Initiate long position of 2.5%-3%
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Final Recommendation
