"Even this summer’s extraordinary
share price run looks to be just
the beginning for innovative
video search technology group
Blinkx (BLNX:AIM) .
Shares first flagged the innovative
video search technology group as a prime
pick at 17.3p during last winter (Plays, 7
Jan). To our irritation, the shares sank to
breach our standard 20% stop loss before
starting their meteoric rise a few months
later. This surge was triggered by May’s
final results, when the Cambridge group
showed the first evidence of its success in
monetising its internet search offerings.
The Autonomy (AU.) spin-out confirmed
it had reached profitability at the
earnings before interest, tax, depreciation
and amortisation (EBITDA) level for
the second half of the year. Since then,
Blinkx’ shares have ripped up from 13p
to 88.7p for a 582% gain. Even so, a
prospective price/earnings ratio of 22.8
times for 2012 does not appear excessive
for this strongly growing company. A
trading update earlier this month (11
Oct) showed Blinkx expected revenues
for the first half to rise by around 100%
from the same period last year, to $27
million. This is expected to generate an
operating profit of above $1 million
when numbers are released early next
month (9 Nov).
Last Friday (15 Oct) Blinkx sold 23.2 million
new shares, representing 7% of the
company. The stock was placed at 84p per
share, generating gross proceeds of £19.5
million. This adds to the company’s existing
cash balance of $17 million (£10.6 million)
and gives it the clout to make an
acquisition. Management was vague in
describing what the money would be used
for, only saying it would ‘support [the]
growth strategy’.
It is also possible the group will use the
new cash to fund general business growth,
via added emphasis on marketing and new
partnerships. In the past six months,
Blinkx has announced a series of content
and distribution deals with among others
the BBC and AccuWeather, as well as a
Samsung (005930.KS) collaboration which
brought Blinkx’s technology to Apple’s
(AAPL:NDQ) iPhone and Google’s
(GOOG:NDQ) Android phones. In June
the group announced a joint initiative with
Microsoft (MSFT:NDQ), which meant
Windows users could use customised
Blinkx software to access video.
‘Video advertising is the fastest-growing
format online ... and we expect to further
accelerate the growth of our business,’
says Blinkx chief executive and
founder Suranga Chandratillake.
Research from eMarketer estimates
spending in this segment will grow 500%
over the next four years to $11.3 billion
by 2014. Blinkx has to date indexed over
35 million hours of video, audio and TV
content, enabling customers to search
and access the material on demand. The
technology, licensed from Autonomy, is
unique in the sense it recognises content
within raw unstructured data, whereas
traditional search technology relies
on keywords.
share price run looks to be just
the beginning for innovative
video search technology group
Blinkx (BLNX:AIM) .
Shares first flagged the innovative
video search technology group as a prime
pick at 17.3p during last winter (Plays, 7
Jan). To our irritation, the shares sank to
breach our standard 20% stop loss before
starting their meteoric rise a few months
later. This surge was triggered by May’s
final results, when the Cambridge group
showed the first evidence of its success in
monetising its internet search offerings.
The Autonomy (AU.) spin-out confirmed
it had reached profitability at the
earnings before interest, tax, depreciation
and amortisation (EBITDA) level for
the second half of the year. Since then,
Blinkx’ shares have ripped up from 13p
to 88.7p for a 582% gain. Even so, a
prospective price/earnings ratio of 22.8
times for 2012 does not appear excessive
for this strongly growing company. A
trading update earlier this month (11
Oct) showed Blinkx expected revenues
for the first half to rise by around 100%
from the same period last year, to $27
million. This is expected to generate an
operating profit of above $1 million
when numbers are released early next
month (9 Nov).
Last Friday (15 Oct) Blinkx sold 23.2 million
new shares, representing 7% of the
company. The stock was placed at 84p per
share, generating gross proceeds of £19.5
million. This adds to the company’s existing
cash balance of $17 million (£10.6 million)
and gives it the clout to make an
acquisition. Management was vague in
describing what the money would be used
for, only saying it would ‘support [the]
growth strategy’.
It is also possible the group will use the
new cash to fund general business growth,
via added emphasis on marketing and new
partnerships. In the past six months,
Blinkx has announced a series of content
and distribution deals with among others
the BBC and AccuWeather, as well as a
Samsung (005930.KS) collaboration which
brought Blinkx’s technology to Apple’s
(AAPL:NDQ) iPhone and Google’s
(GOOG:NDQ) Android phones. In June
the group announced a joint initiative with
Microsoft (MSFT:NDQ), which meant
Windows users could use customised
Blinkx software to access video.
‘Video advertising is the fastest-growing
format online ... and we expect to further
accelerate the growth of our business,’
says Blinkx chief executive and
founder Suranga Chandratillake.
Research from eMarketer estimates
spending in this segment will grow 500%
over the next four years to $11.3 billion
by 2014. Blinkx has to date indexed over
35 million hours of video, audio and TV
content, enabling customers to search
and access the material on demand. The
technology, licensed from Autonomy, is
unique in the sense it recognises content
within raw unstructured data, whereas
traditional search technology relies
on keywords.
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