{"id":925,"date":"2008-07-08T01:00:04","date_gmt":"2008-07-08T09:00:04","guid":{"rendered":"https:\/\/systematichr.com\/?p=925"},"modified":"2008-07-08T01:00:23","modified_gmt":"2008-07-08T09:00:23","slug":"engagement-over-workstream-empagio","status":"publish","type":"post","link":"https:\/\/systematichr.com\/?p=925","title":{"rendered":"Engagement Over: Workstream-Empagio"},"content":{"rendered":"

Why Workstream wanted to be tied to Empagio in the first place never quite made sense to me.\u00a0 When their merger was announced several months ago, everyone knew Workstream needed some cash to continue with their R&D and sales goals.\u00a0 But let’s get this straight once and for all.\u00a0 Empagio is just the rebranded name for the old Tesseract payroll system (primarily).\u00a0 Tesseract might have some large clients still out there, but it’s a sinking ship of a legacy system.\u00a0 Sure, it might take another 10 years to sink that ship, but it’s sinking nonetheless.\u00a0 Workstream having a pretty good product, a good client list, and a not too bad financial position (there are talent players with much more debt and less cash out there), should not have felt the desperation to link up with the likes of Empagio.\u00a0 After all, why merge with a sinking ship?<\/p>\n

To some relief, the deal fell apart<\/a>.\u00a0 Apparently, Empagio’s financial position in their recurring revenue model for payroll was not quite as robust as they had initially lead Workstream to believe.\u00a0 Perhaps the ship is sinking faster than anyone realizes.\u00a0 But aside from Empagio commentary, this should have been a good thing for Workstream.\u00a0 If that is true, how does one explain the immediate drop in stock price, now hovering easily below $0.50?\u00a0 After all, Workstream had a good sales quarter recently, depending on how you look at the books, they could be said to be profitable, and they have an OK cash position (some seven figures in cash and no\/low debt reportedly).<\/p>\n

The problem I see is that the flailing stock price and the low cash reserves doesn’t amount to much in terms of further R&D investment that is needed in this marketplace.\u00a0\u00a0 They laid off some R&D along with sales, and these are the 2 engines a software company needs.\u00a0 To their credit, they kept the customer service organziations intact.\u00a0 But back to the point, Workstream should clearly be valued at higher than the stock price indicates, but they do need a cash infusion to get back on track.\u00a0 What was once an industry leader is having some hard times, partly because of a deal that was weak to begin with.\u00a0 Perhaps they are now an acquisition target, I mean this is absurdly cheap for what they have in terms of functionality and breadth of their suite.\u00a0 We’ll have to wait and see what happens.<\/p>\n","protected":false},"excerpt":{"rendered":"

Why Workstream wanted to be tied to Empagio in the first place never quite made sense to me.\u00a0 When their merger was announced several months ago, everyone knew Workstream needed some cash to continue with their R&D and sales goals.\u00a0…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_coblocks_attr":"","_coblocks_dimensions":"","_coblocks_responsive_height":"","_coblocks_accordion_ie_support":"","footnotes":""},"categories":[2,41,20,3],"tags":[],"class_list":["post-925","post","type-post","status-publish","format-standard","hentry","category-hr-technology","category-point-solutions","category-talent-management","category-vendors"],"_links":{"self":[{"href":"https:\/\/systematichr.com\/index.php?rest_route=\/wp\/v2\/posts\/925","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/systematichr.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/systematichr.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/systematichr.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/systematichr.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=925"}],"version-history":[{"count":0,"href":"https:\/\/systematichr.com\/index.php?rest_route=\/wp\/v2\/posts\/925\/revisions"}],"wp:attachment":[{"href":"https:\/\/systematichr.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=925"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/systematichr.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=925"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/systematichr.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=925"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}