blinkx Surges as Citigroup Favors Video Model: London Mover
blinkx Plc, the developer of video-search technology spun off from Autonomy Corp., surged to the highest price in a year after Citigroup Inc. said the company’s business model and new management are delivering for investors.
The shares rose as much as 26 percent to 85.75 pence in London, the biggest intraday gain since October and the highest price since Feb. 22, 2012.
“With the market as a whole growing 25 percent plus, the company looks well-placed to meet or beat expectations,” Citigroup analysts said today in a note. “Assuming no change to 2014 forecasts, the group will only need to deliver 15 percent- 18 percent growth to meet consensus numbers.”
The U.S. presidential election boosted revenue in the fiscal third quarter, prompting the San Francisco- and London-based company to lift full-year sales guidance today to $180 million to $185 million. Blinkx said in October that full-year sales would be about $164 million. It had revenue of $114.4 million in the last fiscal year.
blinkx was up 22 percent at 11:02 a.m., lifting its market value to 301 million pounds ($473 million). The volume of shares traded was more than three times the three-month daily average. blinkx was the fifth-best performer on the FTSE AIM All-Share Index of 823 companies.
Trading “continued to be strong” in the third quarter as customers adopted a range of products boosted by blinkx’s acquisitions, Chief Executive Officer S. Brian Mukherjee said today in a statement. Mukherjee was promoted in July to lead blinkx, the product of a spinout in 2004 from Autonomy, a software developer now owned by Hewlett-Packard Co.
Hours of Video
blinkx operates a media platform that allows viewers to search videos on the internet, with an index of more than 35 million hours of searchable video and about 800 media partnerships. It links viewers with content distributors, garnering advertising revenue.
blinkx also powers video searches on sites including AOL. It has partnerships with companies including Samsung Electronics Co. and Sony Corp. for services such as mobile video.
While investors may question whether blinkx’s success will be sustainable after “one-off factors,” at least $5 million of the extra revenue should add to full-year earnings, Citigroup said. That would be consistent with about a 25 percent upgrade to consensus estimates for earnings before interest, taxes, depreciation and amortization, the analysts said.
“Following a positive surprise at the first half,” Blinkx’s improved forecast “confirms that the business model, new management and the group’s acquisitions are delivering,” Citigroup said. “Not only should this drive better earnings-per-share momentum but should also support a rerating.”