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Credit Suisse Disruptive Technology Portfolio: RightNow Lowers Cash Flow Forecast And Loses Top Sales Exec

Apr 27, 2007 (08:04 PM EDT)

Read the Original Article at http://www.informationweek.com/news/showArticle.jhtml?articleID=199202342


RightNow Technologies' stock had the biggest move of the Disruptive Technology Portfolio companies after management said it expects cash flow to be 30% to 50% less this year than previously estimated, pushing the stock down almost 15% in the week. Management blamed shorter contracts--down to 20 months from about 30--resulting from a new sales compensation plan. RightNow is transitioning to a completely subscription-based model, and incentives were too heavily weighted to first-year cash collection.

The earnings conference call included news that Jay Rising, head of field operations, resigned. Rising, who joined the CRM vendor from ADP in October, was never fully content with his role at the company and decided to resign, management said. RightNow's 1Q results were slightly above expectations, but the cash-flow shortfall and Rising's resignation overshadowed that.

Overall, the 29-stock portfolio grew 0.9% compared with the S&P 500, which grew 1.6%. Sixteen stocks in the index ended in positive territory, while 13 declined.

Disruptive Technology Portfolio
    Stock Price
4/25/07
% Change
Weekly
% Change
Year To Date
AAPL Apple Computer $95.35 5.5% 12.4%
BIDU Baidu.com, Inc. $104.68 5.7% -7.1%
BBBB Blackboard $33.77 1.9% 12.4%
BRCM Broadcom $34.29 3.9% 6.1%
CNQR Concur Technologies $18.20 0.4% 13.5%
CRM salesforce.com $42.58 0.6% 16.8%
CTSH Cognizant Technology $89.58 2.0% 16.1%
DRIV Digital River $56.47 1.4% 1.2%
EBAY Ebay $33.77 -2.0% 12.3%
GOOG Google Inc. $477.99 0.4% 3.8%
INFY Infosys $53.59 -2.1% -1.8%
KNXA Kenexa $29.37 -8.5% -11.7%
MFE McAfee $29.67 1.6% 4.5%
MRVL Marvell $16.75 -2.5% -12.7%
NOVL Novell $7.15 -3.4% 15.3%
NSR Neustar $28.84 -0.4% -11.1%
NVDA Nvidia Corp. $33.11 6.5% -10.5%
RHT Red Hat $22.14 -2.5% -3.7%
RIMM Research in Motion $135.53 0.9% 6.1%
RNOW RightNow Tech $15.20 -14.8% -11.7%
TLEO Taleo $15.89 -5.5% 16.2%
TIBX TIBCO, Inc. $9.60 2.3% 1.7%
TXN Texas Instruments $35.34 10.6% 22.7%
ULTI Ultimate Software $26.83 -0.6% 15.3%
VRSN Verisign $26.98 1.1% 12.2%
WEBX WebEx Communications $56.74 -0.2% 62.6%
WIND Wind River $10.12 0.1% -1.3%
WIT Wipro $16.49 -1.0% 2.1%
YHOO Yahoo! Inc. $28.06 -0.9% 9.9%
  DTP Index Value $262.76 0.9% 5.5%
SPX S&P 500 $1,495.42 1.6% 5.4%

© 2007 Credit Suisse. Important disclosure information about potential conflicts of interest regarding the companies referenced above may be obtained at csfb.com/researchdisclosures, or by E-mailing equity.research@csfb.com or calling 1-877-291-2683.

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