This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

One Of Envivio's Largest Outside Individual Shareholders Seeks Board Seat At Upcoming Annual Meeting

Several things must drastically change at Envivio in order for shareholders to have a chance of realizing the latent value inherently tied to its technology.  The core issue facing Envivio is excessive spending in pursuit of growth initiatives that will not yield results for years to come.  I believe now is the time for the Board to take decisive action to address the alarming cash burn and hold management responsible for making substantial improvements to the Company's overall operating performance.  To address these issues I have outlined several opportunities that I believe will best position the business for long-term success. 

These include:

  1. Cease hiring until the Company has control over its excessive spending practices .  When hiring commences again, selectively hire only essential technical and engineering talent in France (a country notorious for complications related to workforce reduction) to maintain the flexibility necessary to right-size the business in the future.
  2. Reduce overall headcount to better align the Company's bloated overhead structure to better match its realistic revenue generation capabilities to ensure cash preservation.  The ultimate goal is for a profit-oriented discipline to take hold throughout the organization. 
  3. Shift the Company's sales structure to focus primary selling activity through a well-established distribution network.   Except for a few sales executives necessary to maintain and sell key customer accounts (almost entirely in the USA), this strategy will eliminate the need for much of the existing direct sales force.  It also enables maximum geographical coverage while maintaining a flexible, variable cost structure appropriate for Envivio's size.  
  4. Implement a cost restructuring plan to reduce G&A expenses to a level closer to their pre-IPO amount .  While some incremental costs are required simply because Envivio is now a publicly-traded entity, G&A expenses have swelled to more than $2.3 million following the IPO.  As someone who has managed a business both before and after an IPO, I see no conceivable reason why these costs cannot return closer to their historic levels.
  5. Eliminate non-core engineering activities (such as participation in standards committees) and develop a market-driven incentive program that ties R&D directly to the commercialization and monetization of new products.
  6. Thoroughly examine the Company's cost of goods for opportunities to improve the gross margin to a level north of 75%, a realistic target for a software-oriented company like Envivio.
  7. Develop a robust vendor-specific objective evidence (VSOE) methodology to enable the Company to accelerate the recognition of revenues. 
  8. Implement a new investor relations program to rebuild credibility with Wall Street.   Craft a new message for shareholders (current and potential) highlighting financial transparency, superior cost-management and a metric-driven plan toward achieving long-term, sustainable value through the careful implementation of key strategic initiatives.

These are initiatives I have undertaken with great success for stakeholders in the past and I remain hopeful that you will take me up on my offer to provide assistance now.   The goal should be that the Company will become cash flow neutral at or around current revenue levels; the Company should run its business as if it DOES NOT have a large cash reserve.

3 of 4

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,931.51 -152.29 -0.89%
S&P 500 1,978.29 -9.69 -0.49%
NASDAQ 4,441.4640 -30.6440 -0.69%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs