The Gamble of the year VEI

Not in my top 5 list for this year, but if you were looking in hte next coming months for andrenaline and have a couple of hundred$ left aside that you might want to risk, this play could be really interesting.

Here's why:

This article has not been cautioned by VEI and only reflects my personal opinion and point of view.


VEI: This Company could be the gamble of the year.

What’s going on with VEI ? Since December 2009, no news, no nothing. Don’t they have a new partnership with Answernet? Is it going well, is it generating new customers, are they finally going to get some margins somewhere????
As you can see they are more questions than answers right now and looking at rumours they could be either bought out by somebody else, they could have run out of cash in mid-December so it is time to try to put the right things in perspective.
VEI is a communication company and have one lead product Tabrio that enable communication between customers and companies allowing instant communication between that said customer and the company selling a product.
The difference is that Tabrio is not a device where you need a mike or earphone to communicate nor do you have to type your questions as in a chat room. No, Tabrio will connect your phone number to the call center. Very bright! It is also accessible to the regular you and me to connect between friends around the globe at great prices.
Communication over the net (Voice over Internet Protocol) is getting more and more popular but the problem is a very low % of margin. This is where I think VEI has a problem.
Their cost of sale and marketing is actually much higher than any other business type and would only be worthy if customer base was to grow at a very high speed. Even if 2008 and first 3 quarters of 2009 seem to show a growing number of customers, we do not have any confirmation due to a lack of updates from VEI
Going to Downloads.com you can find the software for free and up to date there were about 75000 downloads since January 2009 and 18 last week. So what does it says: not too popular in the public clientele or not advertised at all. Hope it is going MUCH better on the business customers. I must admit that you can download Tabrio almost on every popular software download sites and the number could be a bit higher. I would be very curious to see the actual number of downloads versus the actual number of users.
Beginning of December they signed a multi-year agreement with Answernet getting access to their 35000 customers for marketing and selling Tabrio.
Since then, nothing seems to have happen so only questions are still in the air and the problem with techno companies is that their past is not warrant of the future as the technology is changing too fast to be compared.
In my humble opinion they sales were not a success, their margin $ is getting lower and their ebitda is probably negative.
There is also a review you can find on internet:
http://www.qualidator.com/WQM/en/TestWebsite/http_www.tabrio.com/Report1851698/ResultCode32.aspx
There score was around 70% of the bench tests. Not too bad but average.
This is not a bright outlook and bankruptcy is getting close to reality base on the absence of comments or news release. When everything goes silent normally there are problems coming.
Even the blogs sites seem confused by the actual situation (stockhouse.com )
To be able to get around this they will need a major increase in customer usage fees or a miracle.
The only encouraging point is that nothing has been filed with Sedar the official filing site for any news release and important changes. (filing there is not a choice but an obligation)
Had they already choose to go bankrupt; they would have filed their intentions but so far nothing. So they could very well be in discussion to get new financing or private placement in exchange for new shares, warrants or options. Who knows?
How about getting another great deal signed?
They have many times resurrected from almost nothing and they could well be pulling out another rabbit from their hat.
And you know what, that could well be the case. On many occasions junior companies (in the sense of capitalization) rebound from their lows and explode. They still have a product, they are still doing business, and they are still making some sales so why not tell the whole world!
IN any case, if you have some $$$ to spare, this play could very well be the play of the year.

Have a great day

François