Bravo and Verticalnet – what the markets think

BravoSolution announced last week that it is buying Verticalnet. Or, as the relevant headline on finance.yahoo.com puts it: Italcementi unit agrees to acquire Verticalnet in deal worth 15.2 mln usd.

Quite big news in the eSourcing technology space. Bravo is a credible player particularly in mainland Europe, backed by €2.8bn Italcementi, but has no US presence. Verticalnet apparently has some good software and has some US customers but has no real idea of how to sell its software. So on one level the tie-up kind of makes sense. I admit it I was of this opinion when I first read the news.

But look at the stock prices of the two companies:

Bravo (Italcementi)
Italcementi.png

Verticalnet
Verticalnet.png

Irrespective of what pundits and marketers might think, the markets are not amused.

The announcement was made public around the 26th October. Just around the time that Verticalnet’s stock tanked. And it certainly didn’t make a positive impact on Italcementi’s share price.

Assuming people were buying Verticalnet stock on the strength of rumours of the company selling out – these people were mightily disappointed when they learned it was Bravo who was doing the buying. And they stampeded.

Meanwhile in Milan no-one even noticed.

Are the markets trying to tell us something? Like:  Software wants to be free. So why should an organisation get involved in costly, complex (and ultimately disappointing) deployments? Especially if they are only going to use a tiny fraction of the system they bought? This e-sourcing software space is so over.