SHU what’s the deal?

[admin]

I dont disagree that there are some sketchy smaller deals deals which will prob amount to very little, but there are others like Citrix, Vodafone, liberty, etc that will over deliver and provide significant upside via cross selling and growth.. Q1 numbers will confirm whether or not Im right or you are undefined

I'm not sure Q1 settles it, even if they beat revenue, which I think is likely:

• We don't know how big a problem the dodgy part of the backlog is and I don't think anybody outside of the company knows. It could be they just have a few dodgy customers, it could be a bigger problem. No way of knowing.
  
• They could very well have sufficient "good" backlog to keep exceeding revenue guidance for quite some time.
  
• But remember, even management itself implicitly admits a considerable part of their backlog is dodgy (as in not likely to convert into revenues). When backlog basically doubled they didn't increase revenue guidance, they materially decreased it and guided 75%-80% conversion, which came out of the blue.
  

One can all pretend that there is no problem, or that it is only small, but there really isn't enough data to arrive at any firm conclusion, and there won't be for some time. 

Another possibility is that they simply do not have the manpower to hook up clients fast enough. The iPass engineers are likely to be a welcome addition, but this could have considerable consequences for OpEx down the line. Again we don't have all that much in the way of firm data to make any informed decision how well their model scales.

I'm not short, I'm a long who became less firm in his convictions that this was a slam dunk to double digits in the face of some compelling evidence. But I readily admit that the problem might be small. We just don't know.