What's the most likely outcome ? Just a content only company ? Bought by PE? A collapse ?
8 replies (most recent on top)
No PE will buy this tu-d. There is no money to make on it.
@j4 fully depends on what happens. OT is very unlikely to go the full bankruptcy route where operations would need to potentially and suddenly stop.
What I think would happen is that assuming things went to worst, more of our coverage on sales would be 3rd party. Meaning we either service on behalf, or pay a royalty. The alternative is when a sold product is no longer serviced by us, where we no longer sell or service it. The catalog of what OT can and wants to sell reduces. Some of those agreements and contracts go to the new owners. Some the customer may try and shop for alternatives ones. Those who stay on whatever products we maintain would get service. Even if acquired.
Most likely if we get acquired, the new owners would reign in and expand audits to try and get a better gauge of how good of a deal they may have gotten. And also to mitigate any inherited problems from some of our licensing he-l. The usual layoffs would still happen. I'd say no team is safe but it depends on what products are left. If business quantity does not change, the usual layoffs could leave the new owners stranded before they can get cheaper replacements.
That would take some time, which if AI becomes a bubble or we accept the issues of workslop, would be enough time for the market to be back in the employee's favor. Right now, studies show over-reliance makes d-mber employees that think less, and the double checks and fixes effectively make it take more work. If we're already cutting to prepare for that well, what's left of OT will likely overcut, suffer, and potentially get sued and/or fined. We don't have much of a Compliance team anymore - that alone should concern regulators as well as potential full acquisition buyers.
So do they stop selling the products? Wha about the customers who are contracted for x amount of years? If the company eventually closes what would that look like?
OT is collapsing right before our eyes
@dx what headcount reductions ?
@av OT cannot "shrink" to grow. This has been the mistake over the past eight or so years where knowledgeable staff have been eliminated in favor of theoretical staff increases in India where there are no innovative product leaders. On top of that, the MF acquisition has created too much debt to service. So the picture is pretty bleak. Too much debt, no growth (2% is not growth that is just the annual price adjustment that takes place at the start of the new year), and more RIF's planned to reduce headcount that will result worse product support. Why is anyone buying OT stock?
Ask Gartner
Stock down 5+% today. Heading back near 52 week lows. Massive $6b+ in debt is like a giant anchor to the stock price. Selling business units and assets to pay down the debt has to happen. However, non-core assets are going to be difficult to sell at a reasonable price because they are in saturated markets - cyber, ITOM, etc.
The lack of a focused and articulated debt reduction plan is ki-ling the stock price and hovering like the grim reaper. So many good people left, layed off, fired, because of bad business and fiscal decisions. MF acquisition was a giant overpay and mistake. Hard to say where it ends up. The revenue and cash flow is still there, but not really growing, and not enough tangible cash and assets to address the debt.