Mercator Continues to Suffer Turmoil - Can They Stay on the Map?
In August 2000, TEC examined the fate of Mercator Software (NASDAQ: MCTR).
Vendor Mercator Drops to a Lower Place on the Map for complete details).
The vendor missed their second quarter earnings estimate by 4 cents a
share (predictions were 8 cents a share), and dropped 54 percent in value.
Estimates showed the stock at $24.75. The company reported higher than
forecasted marketing expenses for Q2, and the fact that Ira Gerard, the
CFO, was stepping down due to health reasons.
that time, Mercator stock has nose-dived to $4.31 (as of December 18,
a 92% drop in the last 12 months), founding CEO and President Connie Galley
has resigned, Richard Applegate has been named permanent CFO (serving
in an interim role since September), and there will be individual Presidents
for each of the regions, which are North America, EMEA (Europe, Middle
East, and Africa), and Asia/Pacific. James P. Schadt, the company's chairman,
has been named as interim CEO until a successor to Galley can be found.
a more positive note, the vendor has announced that for the quarter to
date through November, the company has booked over $18 million in revenue.
This is approximately a 50% increase over the same two-month period in
1999. In addition, Mercator announced that Amazon.com has selected them
as a "key technology" for Supply Chain Integration, specifically in the
area of managing event-driven transaction flows.
is likely that other EAI and B2B vendors are looking closely at Mercator.
Mercator's Integration Broker technology is solid, they have over 5000
customers and 100 partners, and can be had for a bargain basement price.
It is possible (30% probability) that Mercator will merge or partner with
another vendor, hoping to provide an end-to-end EAI/B2B solution. This
is the same approach that was taken by webMethods and Active Software
in their recent merger (see webMethods
gets Active (Software That Is)).
Companies looking at Enterprise Application Integration products should
still include Mercator on a long list of vendors to be considered. However,
it would be wise to keep an eye on where their stock evaluation goes in
the near to mid-term, since their capitalization will effect how they
can fund research and development efforts going forward. Also, as mentioned
above, their currently insufficient market capitalization can make Mercator
subject to a buy-out by another software firm (which Mercator vows to
resist), which could put their product development plans in turmoil.
This article has been modified from its original form since the original