RGM Capital Raises Stake In Bazaarvoice; What's Next?

RGM Capital’s 13D filing indicated it now has a 9 percent stake in Bazaarvoice Inc BV.

The filing stated RGM Capital has initiated talks with management and the Board regarding “strategic and operating margin enhancing opportunities” and that it may “engage with other shareholders regarding the company’s operations and strategic direction,” BTIG’s Abhinav Kapur said in a report.

What The Filing Means For BV

Kapur, who has a Buy rating and $6 price target for Bazaarvoice, stated that “strategic” could mean any outcome, including an acquisition. He added that RGM Capital has beneficial stakes in other technology companies.

Bazaarvoice has a network of more than 160 million active shoppers, representing “one of the most attractive assets in digital commerce,” the analyst commented. He added, however, that the company had delivered two consecutive weak quarters.

Related Link: Traders Talking Bazaarvoice Takeout; Potential Suitors Decline To Comment

Following the delay in launching the recommendations SaaS product, some may be “seeking to speed up the path towards monetizing that asset,” Kapur added.

“With a weighted average cost basis of $5.87, we think it’s clear that the goal here is achieve a return well above our $6 price target,” the analyst noted.

Kapur pointed out this could be “a good time to own the stock,” since the SaaS business was improving and shopper advertising was receiving investments to propel its initial momentum.