LON:PHRM^J17 | Phorm - Investors Thread. | HamsterWheel

22nd Jun '09 by HamsterWheel

84 comments 15030 reads

To avoid discussions about Phorm decending into unwanted squabbles, it makes sense to me to have a thread devoted to the investment aspects of Phorm only.

So no, none, nil, nada, zero talk on this thread about the privacy aspects. As I will be (partially) responsible for moderating this thread, I will delete anything that is not about phorm the company and its prospects. So the privacy angle is not to be talked about on this thread : if you want a thread for privacy, create one.

I realise that the privacy aspects DO have a bearing on whether the company succeeds, but if you want to talk about them, go elsewhere. For the purpose of this thread, assume that Phorm is legal.

Now, numbers are really rather fanciful for Phorm. What matters is whether it can get launched in at least one of the UK and South Korea in the next 12 months i.e. before they have to get their auditors to sign off the next set of accounts. The latest SK trial, underway at the present, apparently involves over 100k people. That size of trial suggests several things :

1) The software should be able to rollout to the whole ISP fairly easily

2) The results of the trial should be capable of being extrapolated so that the benefits for advertisers can be properly calculated.

3) The ISP is happy enough with Phorm to potentially annoy a large number of customers if it goes wrong.

I hope that the outcome will be that the SK launch is not far off, certainly before the end of the year. The success of that will be two-fold - firstly other ISPs will sign up, including the rumoured large Japanese ISP and others in the EU and BRIC. Having those signed up will enable another cash-raising to go ahead if needed (I hope it will be so Phorm can press ahead at speed, but would like it to be priced at £10+).

The number that hit me the most in the latest analyst report was the proportion of web advertising that Phorm could capture if the optimistic scenario occurred - 13%. Google now has the majority of online ads, and garners over $20bn of revenues. So a Phorm getting 13% could well be in the billions of dollars of revenues, and assuming a similar operating margin of 33%, making hundreds of millions…

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HamsterWheel

25th Jun '09

Gloomy sorts at Derwent. Very conservative. Utterly irrelevent to Phorm of course. Though Derwent are advertising hugely recently - you can't open a copy of Estates Gazette or Property Week without seeing their list of properties for rent.

BTCustomer

This comment has been moderated

PengiPete

In reply to HamsterWheel (post #63)

"Pengipete - the £1.1m a month is the current estimate of running costs, so takes into account Korea."

The £1.1m per month is based on the End of Year results for 2008 - there are no figures available for "current running costs" and neither you nor anyone else outside of Phorm knows what Phorm spent last month - or the month since December 2008.

Are you claiming to have access to more recent figures than the last ones published through official channels?

Pengipete - the estimate is by the analysts. I keep telling you that they run the report past Phorm before issuing it. So Phorm get to point out any wild inaccuracies. That is the way analysts reports are done. Please stop repeating this error.

In reply to HamsterWheel (post #69)

Are you seriously claiming that every report ever written by every analyst about every company was presented to the company first for them to approve and/or edit?

Are you saying that every financial report is subject to approval beofre publication?

Is some sort of legal requirement or just a gentlemens' agreement?

If it's not compulsory then how can you state as a fact this specific report is one that has been approved by the company being analysed?

In fact the report contians the following words...

"All estimates and prospective figures quoted in this report are forcasts and not guaranteed."

What it doesn't contain - anywhere - is anything to say that they have had personal meetings with Phorm or access to information that is not freely available to all investors.

Are you aware that this report was created for Astaire customers only?

Are you aware that it would be illegal for Phorm to provide inside information such as their latest operating costs to some shareholders and not others?

Are you even aware that the very first annotaion on the very first graph at the top of the very first page of this report - the one that gives the projections you are basing your claims on - says...

"Source: Astaire Securities estimates"

Are you aware that the chart of potential earnings in the countries which you are claiming contains Phorm's actual expansion plans says...

Are you aware that in every instance where actual numbers or other information is included, Astaire give "Company" as one of the sources and that in each and every case the information used is a matter of public record and not something only available to the analyst?

Pengi - it is what happens. The analysts do it so they don't issue reports with silly mistakes in. The company doesn't officially do anything, but that is the way the process works.

I've done it from the company's side dozens of times.

In reply to HamsterWheel (post #71)

You are still avoiding the question...

Has every report ever written by every analyst about every company been presented to the company first for them to approve and/or edit?

If not, can you state - as a fact - that this one was?

If so, where did you get that information?

No I can't state categorically that. Nor can I state categorically that the sun will come up tomorrow. But it generally does.

Habbakuk

Depends when you live. :)

http://www.athropolis.com/sun-fr.htm

In reply to HamsterWheel (post #73)

Finally!

You have repeatedly claimed that the Astaire report is an indication of Phorm's expansions plans, expenditure and potential earnings - it is the entire basis of this thread and your other one number 2667.

At last you admit that you created this claim and have been forced to admit that you have been mispresenting the Astaire report as factual when it is and always has been an analytical model.

A few minutes ago you wrote "I've done it from the company's side dozens of times." when discussing these analysts' reports. How can you explain the "mistake" in the thread title and the fact that you have made so many claims abut this report and these shares that have turned out to be innaccurate?

You have already publicly posted that you are a chartered accountaant and that you have at least ten years experience of trading shares. As a self-confessed professional in the financial world it seems to me that you would never make such mistakes by accident and I call foul.

Before you hit the delete button, I've already forwarded a copy of this post to the forum administrators. I'll let him decide what to do about a financial professional deliberately posting false claims and misleasing information on their website and trying to manilpulate the value of shares by making those claims.

Take my advice and don't try this scam on any other investment websites - the authorities take a dim view of people who attempt to manipulate share prices in this way.

i won't moderate that Pengi - it is too amusing.

Please note that my post #61 which was deleted by the thread's starter has now been reinstated.

You may wish to scroll down and read it if you missed it first time around.

Pete

Administrator

In order to give the participants some "time out" to reflect on the issues raised, this thread has been temporarily suspended. Likewise, any new Phorm threads will be suspended. We may reopen this thread in due course.

fuzzybear

14th Dec '09

yee haa phorm.....stock price been going up the last weeks.....V-interesting

Please study the history of this thread carefully before jumping in. You may also wish to research the legal, reputational, privacy and technical difficulties in which Phorm have been mired since early in 2008.

Since this thread was closed down in June, the share price of Phorm has crashed even further, as they lost their major ISP customers in the UK, BT, TalkTalk and Virgin Media, following BT's public trial of Webwise which failed on technical grounds. The promise that Webwise would be rolled out with BT "definitely by the end of 2009" proved to be wishful thinking.
Since then they have done a "market trial" in Korea, which was due to move to commercial rollout by the end of November. They missed that deadline too, and Sarah Simon of Phorm has confirmed they are currently NOT live anywhere in the world. (at BEUC 2009 15th November)
They continue to lose important staff and executives - their UK MD has left to work for Mippen. They no longer publish details of their executive team on their website due to high level departures such as Chris Hogan and Nick Barnett and Stratis Scleparis their CTO.

The outstanding CPS prosecution case against BT and Phorm opened over a year ago, has been reactivated with a request from the CPS to the CoL police (October 2009) to do further investigation into the covert trials with BT in 2006 and 2007. That investigation is by no means dead and buried.
The EU action against the British government is also in its final stages, relating to their failure to protect consumers against Phorm. The government have only a few weeks remaining to make their final response to the EU.

DPI firm Detica recently made reference to the iprivacy problems of Phorm, so it seems even other DPI firms think they were beyond the pale.
http://technology.timesonline.co.uk/tol/news/tech_and_web/article6956587.ece
"Mr Klein said that CView is not reliant on a user’s IP address to work whereas Phorm’s deep packet inspection technology needed the customer details to work." We now have other advertising BTA firms as well as DPI firms all seeming to want to distance themselves from Phorm.

It is over six months since Phorm had any positive news to share with the world. The share price has recently lifted following manouevering by institutional investors, including some movement related to the asset sales by Lloyds TSB who owned a signficant Phorm investor, Insight Investment.

there may be speculative gains to be made by brave professionals or those with money they can afford to lose. But the background picture for this company remains grim with no declared ISP customers, no advertisers, no income, and major legislative hurdles to overcome before it can begin to operate in most countries around the world. Take care.

15th Dec '09

sorry Mr BT customer.....I.dont agree...do you really think some of the biggest institition's in the world would have backed this Co...3 times if they think this is illegal....there's more than one way o skin a cat....i'm a backer i think they have a world to play with and i believe the mkt is so big...they can do it.....fingers crossed...sorry this may upset you...but still its xmas soon

But the difference between your posts and mine is that mine are full of verifiable facts.
If we had asked your question (do you really think some of the biggest institution's in the world would have backed this Co...3 times if they think this is illegal..) just before each of the massive crashes in the Phorm priceover the last 18 months or so, and if people had been convinced by your line of reasoning, they would have lost money big time.

It is the business of these large investment firms to put a small proportion of their money in speculative startups. That is normal. They accept a high degree of risk. It is foolish for the private investor to follow their lead using your logic. Because the private investor generally needs a much lower level of risk. Phorm have even been highlighted in the annual report of one of the major investor funds, as the reason why that fund did so poorly last year. What a distinction! (I think it was BlackRock)

Consider more facts - Phorm have claimed, falsely, that their product is compliant, and have quoted, wrongly, statements from Home Office, DBIS/DBERR, ICO and EU in an attempt to prove their case. Every single one of those bodies has since issued a specific denial of the Phorm claim about compliance when they have been challenged about it - I have each one archived. And the EU have put their money where their mouth is with the infringement action against the UK government which is ongoing at the present time. Home Office denied giving any legal advice or opinion about Phorm or its compliance. DBERR/DBISS specifically refuted Phorm's claim to be "fully compliant". ICO has publicly indicated that Phorm's methodology in both the covert trials AND the public trial was NOT compliant with DPA/PECR. The EU have gone to press several times vigorously attacking what Phorm are doing. Who thinks it is legal? Oh yes - Phorm do, and BT do. As Mandy Rice-Davies once said, "they would, wouldn't they?".

These investments by the "biggest institutions in the world" (investing a TINY proportion of their assets in Phorm) the fund managers probably didn't even consider the legality of this product. They weren't investing enough to make a thorough legal opinion worth getting. They probably didn't even THINK about it. So to take their lack of interest in the legality of a product they didn't even understand, as a guide to the private investor, in the face of the advice of Queens Counsel, the denials of two UK government ministries, the ICO, and the EU Commissioin, would be folly indeed.

If the legality is beyond reasonable doubt, why did the CPS request CoL police to gather further evidence for their prosecution file? Why not just throw the prosecution case out? - after all they have had it for a year.

If you seriously think these large corporations would never do anything illegal I suggest you pay more attention to the news. Just google and you will find the prosecutions and the charges of illegallity.

But the real challenge - please do back up your opinion with facts. You say you are a backer. Let's hear your case. I say there are opportunities for brave people to make speculative gains because this share is volatile. But every fact I can find says - beware!! I have NO news that suggests anything other than this company is running out of cash, has no product, no customers, major legislative barriers, a lousy reputation and a grim future. That's not prejudice - that's analysis of the FACTS over the last six months.

sorry Mr BT customer i like them........we will have to agree to disagree....lets wait and see who's right......should be interesting at the least.....

Phorm - investors thread.

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HamsterWheel

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