One (Counter-Intuitive) Investor Has Been Aggressively Adding To Its Mattersight Holdings, Of Late…

Boston Partners owns 1.184 million shares, give or take, of Mattersight, per its latest SEC Schedule 13F Holdings — as of November 2, 2017. Not that terribly long ago, more than a million shares accumulated in the company would have pushed a given holder over the five per cent threshold, triggering more detail and timely ownership reports at the SEC. However, due solely to Mr. Conway’s steady drumbeat of GAAP Operating Loss-absorbing (and cash generating) share issuances, the former Robeco fund entities (at One Beacon Street, in Boston — now known as Boston Partners, after 2015) remain well below that trigger-point.

As of the end of Q2 2017, August 2, 2017 actually — the entity only owned 813,400 shares — so it has increased its stake by nearly 30 per cent in the third quarter of 2017. So the group has been a buyer, at perhaps as low as $2.10/share — and as high as $3. We won’t ever know, since they didn’t cross the threshold mentioned immediately above.

It held 715,648 shares as of year end 2016 — and only 560,258 shares at this time, last year. So clearly the Boston Partners were believers in some sort of up-tick arriving, and soon.

Will the group add more between now and year end? We shall see — in early February 2018.

I (for one) think — even with their so-called long/short strategy — these guys are going to be licking their wounds… on any shares bought above $2.15, come year end 2017 GAAP LPS announcements (due in late February 2018).

Be careful out there.

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9 thoughts on “One (Counter-Intuitive) Investor Has Been Aggressively Adding To Its Mattersight Holdings, Of Late…”

  1. I’m not sure what the investor you mention is smoking or thinking, but there have been many previous investors influenced by the CONfidence presented by MATR management. I’d think they should be a little more cautious about accepting this CONfidence, unless the investor has some special information that other investors don’t. Of course, that would present other problems.

    Having reviewed the CONference call text. I have a few questions.

    1. Given the CONference call occurred on Nov 7, well into Q4, why was management not able to pin down a Q4 revenue number better that between 12 and 14 million?

    2. MATR did approximately $1.5M better than I expected, BUT this was almost solely due to a reduction in sales and marketing expenses. How come no one poked into the reason for this? MATR’s incentives to their sales reps has been rumored to be very rich, but why wouldn’t a drop in sales and marketing expenses, given a significant portion of these costs are sales commissions, be of great concern regarding future sales as an indicator of great softness for Q1 and Q2 and beyond?

    3. MATR talked about their new marketing “strategy” and how that was going to be a HUUGE factor going forward. The way in which they explained this innovation was that they were refocusing their attention on the true decisionmaker and influencer in the prospect’s organization. Why was this merely lapped up by the analysts? Isn’t this what good sales people have done for ages? WTF were they doing in the past? Selling only to family and friends?

    4. This is supposed to be a annuity revenue stream business with increasing economies of scale, yet there were mentions of finding resources required to implement new customers. Aren’t resources from existing, implemented customers made available to implement new customer systems? People seem to be a bottleneck for MATR.

    5. About those resources and MATR’s calculation of operating margin. If a significant number of resources are required to implement and maintain the operation of a customer’s system, are those costs being properly categorized as operating costs. I suspect there are a number of resource/costs that are buried in R&D, sales and marketing, and G&A that should rightly be classified as operating costs and that the true operating margin is likely much lower.

    Finally, MATR presented at the investor show where I’m sure they exuded great CONfidence in their business prospects. Given the historical softness of Q1, investors should be cautioned against a Q4 tuned to perfection that may not properly reflect the state of the business and potentially lead to a much softer than expected Q1.

    Cheers!

    1. Excellent man! One smallish point — on your last bit:

      I do think the “resources” mentioned in the call mostly referred to the CLIENT’S constrained resources — to oversee installs, when the thin IT staffs at many of the largest clients spend most of every waking hour patching and securing in-house stuff already installed, as new exploits are identified….

      But I may have misunderstood Conway’s shineloa…

      Namaste!

  2. Mattersight has been losing some steam of late even though the broader market has been screaming higher. Today’s downward move on much higher volume at the end of the quarter may mean there’s some bad news coming.

  3. I can’t wait for Mattersight to pull a desperation Hail Mary and try to climb on the blockchain bandwagon with some goofy new pointless patent!

    1. Hilarious — and sadly… bitcoin probable!

      I am pretty sure there is going to be bad news about Q4… it’s just a question of when it leaks out.

      Oddly, I noticed (about two weeks ago) that essentially all of the sub-page content — of Mattersight’s investor relations pages — has been deleted. It seems no one is left at HQ to mind the tiny bit of needed html wrangling… so it just points to the SEC EDGAR archive now. Nothing hosted — no stock price chart; no FAQs… zip. That’s… not a great sign.

      We shall see — as ever.

      [Confidentially, speaking of seeing — smiles — twice at 2:09 PM, too…]

      1. Mattersight Blockchain Technologies? Predictive Blockchain Technologies? Blockchain Personalities That Matter? Release your inner blockhead, it’s all that matters?

      2. “Con-Way’s BIG-Blockchain”: once you go con-way… you’ll be… way-conned! Bringing the bit- back — to bitcoin hustles!

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