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Augme Technologies Unveils Restructuring Plan, Now What? (AUGT)

What comes after the restructuring? A good question that traders in Augme Technologies (OTC: AUGT) will want to have some answers for. On Friday morning, interim CEO Robert Hussey unveiled plans to make the company leaner while maintaining the goal of protecting strategic assets. According to Hussey, Augme Technologies will work to minimize its cash burn rate through a combination of headcount reductions, tightening the belt on variable expense items and slowing the pace of investments in the company’s IP portfolio. The expected benefit of the plan is an improvement of $6 million in cash flow with a one-time restructuring charge of $1 million.

Maybe traders still felt exhausted from the anticipation of the news, which saw share prices jump nearly 85% last week from $0.70 to $1.30, as buyers showed little interest in a rally after the previous day’s sell-off.  The stock opened the new trading week two pennies higher than where it ended the day on Friday. By the time the first 30 minutes of trading had elapsed, share prices began a session-long decline. The intraday high of $1.13 came moments after the opening bell. Trading remained rather listless through most of the day until the final two hours. Almost two-thirds of the day’s volume occurred in the last 120 minutes of the trading session. When the closing bell rang, shares of Augme Technologies ended the day with a loss of 12% to finish the day at $0.96 and just a penny above the intraday low. The 328,000 shares exchanging hands on the day fell short of the 461,000 traded on an average day.

Over the last 12 months, the stock has seen its ups and downs, but mainly the latter. After hitting an annual high of $3.58 almost a year ago, the stock fell over 50% until the New Year. The slide coincided with the closing of a public offering for 9.4 million shares of common stock priced at $2.15 on November 17, 2011. Share prices managed to recoup roughly half of the decline through the spring. June, however, saw another selling spree in the stock after the company issued revenue guidance for the first quarter of FY 2013 below previous estimates. Just five days ago, the stock touched a fresh 52-week low when shares traded for $0.67. Traders must decide whether the announced restructuring plan starts a new chapter in the life of the company or if it represents a refurbished cover on a tattered book.

In other recent news, Augme Technologies announced preliminary second quarter revenues on September 6, 2012, that showed a record of $6.1 million to $6.3 million.

In early September, the United States Southern District court handed down what Augme Technologies viewed as a favorable ruling in the company’s patent infringement suit against AOL (NYSE: AOL) and Gannet (NYSE: GCI).

On August 27, 2012, Augme Technologies said its subsidiary, Hipcricket, will extend its mobile marketing and advertising opportunities to three additional radio systems as part of its five year contract with the Spanish Broadcasting System (NYSE: SBS).

The New York-based company provides technology and services that allow advertising agencies and media companies to integrate digital content through the Internet and mobile devices. The company was founded in 1999.

 

 

Published by Alan Masterson

Alan has over 25 years of trading experience in the U.S. equity markets. He began his career in finance working on a program trading desk specializing in over-the-counter stocks. His career progressed from that point to his current position as senior trader on an institutional trading desk. In the evenings, Alan teaches economics at a local community college. He has contributed articles to various publications over the last six years, including feature articles for an economics magazine and various financial blogs. You may contact Alan via his email ([email protected]) or his Google+ page (https://plus.google.com/103338576216002376250).



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