Short Zix Insurmountable Competition

Short Zix: Insurmountable Competition
|Must Read Sep. 30, 2015 9:31 AM ET3 comments
by: Lester Goh
Summary
• At 4.4x EV/sales, shares of Zix Corporation are expensive on an absolute
basis. Relative to close comp MobileIron, they are dramatically overvalued.
• Following MOBL's Q1 warning, the firm fell 35% due to fears of increased
competition from heavyweights such as Microsoft and VMware.
• Zix did not follow MOBL's lead - shares continued rising after MOBL's
warning, and only fell slightly due to an analyst downgrade and a poor Q2.
• The market appears to be ignoring the fact that Microsoft and VMware are
also Zix's competitors. Low-ROI R&D/meager growth indicates intensifying
competition/growth is unlikely to accelerate.
Short Zix: Insurmountable Competition - Zix Corporation (NASDAQ:ZIXI) | Seeking… Page 1 of 22
http://seekingalpha.com/article/3542476-short-zix-insurmountable-competition 1/8/2016

• The Google deal/Cisco's exit & collaboration seems unlikely to yield the
benefits expected. If Zix trades in-line with MOBL, shares would see 70%+
downside from current levels.
Thesis
Shares of Zix Corporation (NASDAQ:ZIXI) are a compelling short at current levels.
Specifically, it is my view that shares are an enticing short because:
• Earlier in April, MobileIron (NASDAQ:MOBL) issued a Q1 warning announcing
that results would clock in lower than guidance and cited increasing competition
from tech heavyweights such as Microsoft and VMware. Zix's management has
cited MOBL as a competitor, which makes Microsoft and VMware Zix's
competitors as well. Given their dominance in the enterprise space, it would be
extremely difficult for Zix to compete effectively. EMM ("enterprise mobility
management") growth for Microsoft and VMware outpaced Zix's by a wide
margin.
• Although Zix has kept up R&D/marketing spending, these efforts do not seem to
be bearing fruit. Considering the entry of tech giants such as Microsoft/VMware,
you would be hard-pressed to convince anyone that Zix can compete effectively
against these players, given the sheer differential between their R&D/marketing
budgets.
• The bull case for Zix - the procurement of Google as a reseller/the exit of Cisco
and eventual collaboration - seems misguided. If Zix could benefit from the
above, one can argue that said benefits would have already been shown in its
results. Nothing in the company's recent performance indicates any acceleration
or momentum.
• Insiders have been selling shares aggressively. Notably, in the last 12 months,
insiders have only sold, never bought. This speaks volumes of management's
confidence in the firm.
• At 4.4x EV/sales, shares of Zix are expensive on an absolute basis. Relative to
close comp MobileIron - who trades at 1.1x EV/sales - they are significantly
overvalued. The overvaluation is even more absurd when one considers that

MOBL possesses a much stronger growth profile and an arguably more
complete offering (and thus better competitive position) when compared to Zix.
• Given the unlikelihood of acceleration in operations, any potential for shares to
move up drastically is substantially reduced. Moreover, given its weak growth
profile, small size, and increasing competition, the probability of an acquisition of
Zix by a larger tech company should be close to zero. However, Zix currently
has a share repurchase program (~$15m) in progress, which could mean a
slight appreciation to shares/a floor to the current share price is not out of the
question.
Ultimately, my thesis essentially boils down to this - the bull case is misguided.
Zix trades like a high-growth stock despite mere single-digit growth.
Increasing competition would result in limited opportunities to grow and
investors should not expect a substantial acceleration in the top-line to stem
organically given the company's history of product flops (ZixDLP/ZixOne).
With limited probability of being bought out by a competitor, and high unlikelihood of
results exploding positively, it is my view that potential for shares of Zix to move
parabolically higher is severely reduced. Couple this with the fact that a much faster-
growing peer (MobileIron) trades at a ~3 turn EV/sales discount, shorting Zix seems
compelling here.
Company Description
Given the presence of large amounts of publicly-available research on Zix and its
industry (EMM/security is a very hot industry at the moment given the numerous
data breaches experienced by many organizations recently), I will keep my
description brief.
Zix operates in the high-growth (though the firm does not seem to be benefiting from
this growth) EMM/security industry. The company's main product is email
encryption. Given the fact that email is the communication medium of choice for
businesses, and that Zix's email encryption offering does not require user
authentication, customers tend to be sticky and revenues highly recurring. In
addition to email encryption, the firm also has additional offerings such as email
data loss prevention ("ZixDLP") and other BYOD ("ZixOne") solutions.

MOBL's Q1 warning led to a massive selloff, but Zix barely moved following
the report
In April, MOBL issued a Q1 warning, trimming guidance slightly. Given the relatively
small haircut (guidance was ~3-5% lower), one could have justified a small selloff.
Yet, shares fell 35% following the warning. MOBL cited increasing competition from
a number of large players, notably Microsoft and VMware, but the list includes other
tech mammoths such as IBM and SAP as well. Clearly, the reason for the huge
selloff (instead of a small one) was due to increasing competition.
Following a weak Q1 was a soft Q2. Despite beating Q2 estimates, guidance was
once again slightly trimmed, and increasing competition was once again cited.
Shares of MOBL fell ~8% following the Q2 report.
Why does this concern Zix? Simple. As seen in Zix's recent investor presentation,
the company cites Proofpoint, VMware and MOBL as competitors.
Notably, VMware/MOBL are only cited as competitors in the BYOD market, which is
not Zix's crown jewel. This may be a factor contributing to the stock's mispricing -
investors could have possibly reasoned that although Zix faces competition, this
competition is in one of Zix's smaller offerings.
Moreover, the slides do not mention Microsoft/VMware as a competitor within email
encryption (Zix's crown jewel). As the reader will learn in the next few paragraphs,
the situation is much more dire than implied by the company.
Bad news for MOBL is equivalent to bad news for Zix. Yet, shares of Zix soared
following MOBL's April Q1 warning (possibly aided by its share buyback program)
and have only recently retreated due to a weak Q2 and an analyst downgrade.
It is important to note that Zix's email encryption offering is its crown jewel - the
offering accounted (and continues to account) for a majority of the top-line (numbers
to illustrate this will be provided in a later section). Though the company frequently
alludes to the massive market opportunity, it has little growth to show for it
(revenues have been growing at mid to high single-digits, not exactly exploding),
leading one to wonder - if the opportunity is so large, why can't Zix capitalize on it?

One word: competition. Microsoft and VMware, with their entry into the EMM space,
have also created their own email encryption offering. Microsoft's offering is known
as "Office 365 Message Encryption" (it seems to be integrated with its cloud
productivity suite and Azure platform) while VMware's offering is called "CipherMail
Email Encryption Gateway". A brief reading of their descriptions reveals striking
similarities with Zix's email encryption offering.
Here is how Microsoft describes Office 365 Message Encryption:

Office 365 Message Encryption is an online service that's
built on Microsoft Azure Rights Management (Azure
RMS). With Azure RMS set up for an organization,
administrators can enable message encryption by
defining transport rules that determine the conditions for
encryption. A rule can require the encryption of all
messages addressed to a specific recipient, for example.
When a user sends an email message in Exchange
Online that matches an encryption rule, the message is
sent out with an HTML attachment. The recipient opens
the HTML attachment in the email message, recognizes
a familiar brand if that's present, and follows the
embedded instructions to view the encrypted message
on the Office 365 Message Encryption portal. The
recipient can choose to view the message by signing in
with a Microsoft account or a work account associated
with Office 365, or by using a one-time passcode. Both
options help ensure that only the intended recipient can
view the encrypted message."
Source: Microsoft
And how VMware describes CipherMail Email Encryption Gateway:

CipherMail gateway provides an easy-to-use solution to
securing your email without requiring additional client
software. The centralized policy based encryption engine
can be setup to automatically encrypt email based on
regulatory compliance or business rules thereby
minimizing human errors which might result in a data
breach. The gateway seamlessly integrates with existing
anti-virus, anti-spam and archiving products. For
additional security, all private keys can be stored on a
tamper proof hardware security module (HSM). The
CipherMail gateway supports S/MIME, OpenPGP, PDF
encryption and TLS.
Ciphermail email encryption gateway can be installed as
a virtual appliance for VMware and can be installed on
most Linux and Unix based systems. Installation
packages are available for Ubuntu/Debian, Red
Hat/CentOS and OpenSUSE."
Source: VMware
And finally, here is how Zix describes its email encryption offering:

"Whether your company has 10 or 10 million employees,
ZixGateway is your solution for easy email encryption.
Employees simply click 'send.' We do the rest. With full
content scanning of the subject line, message body and
attachments, ZixGateway can encrypt, route, block or
brand outbound email based on corporate policies.
Receiving encrypted email is just as easy. When a
ZixGateway customer sends encrypted email to another
ZixGateway customer, the email and replies are
delivered securely and transparently. No extra steps or
passwords are needed. Just in case your receiver isn't a
ZixGateway user, we use the Best Method of Delivery to
deliver the encrypted email in the easiest manner."
Source: Zix
Considering Microsoft's and VMware's dominance in corporate
productivity/virtualization respectively, I believe it is safe for me to assert without
fear of being refuted that Microsoft and VMware are likely to dominate the email
encryption space going forward.
These players have client bases that dwarfs Zix's, much more widely-known brand
names, and drastically higher R&D and marketing budgets. In case the reader is
unconvinced, Microsoft's EMM customers jumped 90% y/y to 17K+ while VMware's
AirWatch (its EMM offering) rose 60% on a constant currency basis. Contrasting this
with Zix's paltry single-digit/low double-digit growth, the story does not look good.

The sheer differential between their growth rates suggests that clients are simply
looking for a complete solution (email encryption with a productivity suite in
Microsoft's case and email encryption with virtualization in VMware's case), not a
point product (ala Zix). This certainly explains why Zix is unable to grow past single-
digit rates.
Low-ROI/relatively small-scale R&D
Zix has consistently been spending ~$9m-$10m annually on R&D. This spending
has resulted in the development of two new offerings: ZixDLP (email data loss
prevention) and ZixONE (BYOD). Despite new product introductions, their
contributions to revenue have been minuscule.
From the Q4 FY14 conference call (emphasis mine):

In terms of customers and licensed seats we now have a
total of 84 DLP customers and approximately 155,000
licensed seats, with nearly 90% of these in large
enterprise accounts. The average per user subscription
price for these 155,000 seats is $3.69 reflecting a large
concentration in enterprise accounts. We continue to see
DLP as a highly complementary offering to our core email
encryption business and our sales teams, both corporate
and enterprise offered us a package solution to accounts
new to Zix. Slightly more than half of our ZixDLP sales
have come in this manner and the other half have been
upsells to the existing base.
We had an exceedingly strong quarter for ZixOne adding
a record high 96 new ZixOne customers during the fourth
quarter. This surpassed the previous record of 56 set in
the third quarter of 2014 and represents a sequential
increase of 71%. This addition of 96 new ZixOne
customers grew our lifetime ZixOne customers by
57% to a total of 264. Of these 264 customers
approximately 40% have been new accounts to Zix and
60% have been additions into our installed base.

The average number of seats across all ZixOne
customers was 68 and the new seats sold during the
quarter increased approximately 120% from the third
quarter with the addition of more than 7,700 new seats.
This brings the total number of ZixOne licensed
seats to more than 18,000 from approximately 10,000
last quarter, a 75% increase. The average price per user
for year looking at all ZixOne customers at the end of the
quarter was $27."
Source: Zix's Q4 FY14 Earnings Call Transcript
Fast forward two quarters to the most recent quarter (Q2 FY15, emphasis mine):

Also the price per seat in Q2 for these new DLP
customers was higher than our average and was a little
over $5 per seat, bringing our lifetime price per seat up a
bit to just over $4. In terms of customers and licensed
seats, we now have a lifetime total of 119 DLP
customers and approximately 186,000 licensed seats,
with approximately 84% of these seats in large enterprise
accounts. We continue to see DLP as a highly
complementary offering to our core email encryption
solution and our sales teams, both corporate and
enterprise, offer it as a package solution to account new
to Zix. Slightly more than half of our sales come in this
manner and the other half have been upsells to our
existing base of email encryption customers.
We had our second best new customer quarter ever for
ZixOne, adding a near record 82 new ZixOne customers.
This represents an 82% increase year-over-year. This
addition of new ZixOne customers grew our number of
lifetime ZixOne customers 26% to a total of 393. Of
these 393 total customers, approximately 40% are new
accounts to Zix and 60% have been additions into our
installed base. The number of new seats sold during the

quarter was nearly 4,800. This brings the total number
of ZixOne licensed seats to nearly 26,000, up from
approximately 21,000 last quarter, a 23% increase in a
single quarter. The average price per user per year,
looking at all ZixOne customers at the end of the quarter,
was $33; no change from the prior quarter.
The average number of seats per customer across all
ZixOne customers was 66, which highlights the
opportunity for expansion within these customers, similar
to what we've seen occur with our DLP product. In terms
of new first year orders, ZixOne contributed 50% more to
our results in the first half of 2015 versus the same period
last year."
From the above commentary, the unsuspecting reader would probably be thinking
that the company is experiencing huge momentum. However, if we put the above
numbers into perspective, it appears that this "momentum" is nothing to write home
about.
From Q4 FY14 to Q2 FY15, ZixDLP customers grew from 84 to 119 while seats
grew from 155,000 to 186,000. Over the same period, ZixOne customers grew from
264 to 393 while seats grew from 18,000 to 26,000. If we put these growth numbers
in percentages, it seems like these offerings are growing very quickly. However,
these numbers are infinitesimal compared to Zix's core email encryption offering.

Per the July 2015 investor presentation, the email encryption offering had a
customer base of 12,000 and ~2.7m seats (paid end users). Any way you slice it,
revenue contribution from ZixDLP/One is immaterial.
Notably, average seats per customer for ZixOne (the highest price-point offering:
$33/seat for ZixOne vs ~$20/seat for the core email encryption offering and
~$4/seat for ZixDLP), actually decreased from Q4 FY14 to Q2 FY15 (68 to 66, data
sourced from the quotes above), suggesting at the very least that the company's
client base does not seem to be too excited about deploying its solution
enterprise-wide. This trend is also present for Zix's DLP offering (data sourced
from quotes above) - in Q4 FY14 Zix had 84 DLP customers and 155,000 seats or
1845 seats/customer on average. Two quarters later (Q2 FY15), Zix had 119 DLP
customers and 186,000 seats or 1563 seats/customer on average.
The above trend suggests one of two things (likely both):
• Zix is selling to much smaller customers than before, which will clearly result in
lower revenue contribution given that its offerings are priced on a per seat basis.
• Larger customers (measured by number of seats) are leaving Zix and are being
"replenished" by smaller customers.
Either way, the Zix story does not look good. The narrative becomes even more
dreadful if one considers the fact that Zix's R&D/marketing budget is a fraction of
that of its competitors (Microsoft, VMware, etc). Talk about bringing a knife to a gun-
fight.
The apparent bull case for Zix
The curious reader would then wonder: if the story is so bad, why are shares priced
so highly?
The bull case for Zix is fairly apparent. The company has strategic partnerships with
OEM leaders such as Google, Cisco, and Symantec. The firm clearly considers
these names as their best partners given that they specifically list them in their
investor presentation (slide 28).

These players have huge networks and client bases. With Zix partnering up with
them, it is not hard to come up with the case for owning Zix. To illustrate the bull
case in numbers, Zix claims that Cisco has a distribution network of 68,000 resellers
while Zix has a network of only 300 (per Q1 FY15 earnings call transcript).
Additionally, Cisco was originally a competitor to Zix, but has exited the space in
2012. In July of that year, Cisco announced the end of its IronPort encryption
solution but promised to continue to issue maintenance releases until July 2015.
Couple this with the firm's partnership with Zix (in early 2015), one can assert that it
is likely that Zix will be able to capitalize on former Cisco's customers' need to
migrate over to the new provider.
Following these developments (largely occurred during 2014/early 2015), shares of
Zix rose substantially from $3 to $5. Clearly, investors were pinning their hopes on
Zix's partnerships with Cisco, Google, and others.
Reason for the mispricing - the bull case is misguided
Despite the positive developments listed above, Zix does not appear to be
benefiting much, if at all, from any of them. Year-over-year revenue growth rates
remain in the single-digits quarter after quarter. What's more revealing is that
revenue was flat sequentially (at ~$13m) over the past 5 quarters (per
Morningstar data). Clearly, nothing in Zix's recent results suggests any near-term
explosion in growth.
In addition, the firm attributed poor growth at the end of Q4 FY14 to a delay in ramp-
up from Google resellers. Q1 FY15 was the first quarter where the company
experienced a full 3-month contribution from Google resellers (emphasis mine):

As most of you know the resumption of sales of our email
encryption service through Google's resellers did not take
effect until last October. This quarter Q1 is the first
quarter where we're reporting a full three months of
Google sales since that announcement. We
anticipated that we take the reseller's time to get trained
and reengage but given what we now know we
underestimated that ramp up time."
Yet, revenue barely budged on a sequential basis - Q4 FY14 revenues were $12.9m
while Q1 FY15 revenues were $13.1m. Clearly, even with the aid of Google's
reseller network, Zix did not perform at a level that would justify the rise in shares
($3 to $5) in 2014.
Despite the apparent poor contribution from strategic partnerships, management
comments continue to be upbeat overall, with numerous claims alluding to the
possibility that the top-line is on the cusp of exploding. From the Q1 FY15 call
(emphasis mine):

Now the big news, on March the 5th, we announced a
new strategic partnership with Cisco. It was too long
ago that Cisco was our largest competitor. Now we are
approaching the market as partners combining the
strength of their world class distribution and our
technology. The partnership will focus on two solutions in
2015. First of all as we've noted before, the announced
end of life of the current Cisco IEA product has
created a number of large potential opportunities
with Cisco's install base between now and the end of
the year. The partnership agreement is designed to allow
these customers to move seamlessly to a new IEA
product that we are building using the original Cisco IEA
code base.
The update version of Cisco IEA will include new
hardware as well as software patches to protect against
the latest security threats. Encryption capabilities
reporting and end user interaction will remain the same in
the new version, so customers will have a seamless
transition.

We will provide the technical support for this new
IEA product and Cisco will begin to accept orders
ones the product is released scheduled to be later
this quarter. We expect that this first phase of our Cisco
partnership will allow us to maximizes our sales to this
base of large accounts and will position us well for
potential future upgrades."
Notably, the company mentioned that it will begin accepting orders from Cisco's
installed base later this quarter (the Q1 FY15 quarter). To ascertain their progress,
we need to look no further than the second quarter numbers (or the most recent
quarter). The numbers are underwhelming to say the least: new orders grew to
$2.5m or a mere 5.5% y/y. Despite this poor performance, management continues
to be very positive about the company's future (per their comments on the call).
In sum, I believe that the bull case (that the Cisco/Google partnership will result in
an explosion in the top-line) is misguided. Probably the two best validators of my
bear thesis are as follows:
• The company increased the number of VARs (value-added resellers) and
MSSPs (managed security service providers) from 97 to 240 and 94 to 131 over
the 2012-2015 period respectively (slide 29 of investor presentation). Said
another way, VARs nearly tripled while MSSPs grew by about a quarter. Yet, the
firm's top-line grew from $43m (2012) to ~$52m (on a LTM basis). This suggests
that Zix's offerings may not be as highly demanded as investors hope they will
be. In sum, the Google/Cisco partnership is unlikely to result in the surge
of the company's top-line that investors hopes it will.

• Management's upbeat comments about the company's future is not reflected in
their actions. Per Nasdaq/Finviz data, insiders have aggressively sold shares
(on both a 3-month and 12-month basis). Notably, there were zero buy
transactions during the period. This raises the obvious question: if
management is so confident (apparent from their comments) regarding Zix's
future, why sell shares?
My theory as to why Zix's top-line has been unable to gain traction is rather simple.
The company offers point products - products that are meant to address a single
problem. Its email encryption offering, ZixOne and ZixDLP are all centered on
solving a single problem - email security.
However, the data (flat revenue sequentially, single-digit top-line growth rates,
declining average seat/customer, etc) suggests that enterprises are not looking
for point products, they are looking for solutions.
This view is supported by the fact that Microsoft and VMware (who most certainly
offer solutions, not point products) have managed to grow their EMM offerings by
high double-digits (90%+ for Microsoft and 60% for VMware on a constant-currency
basis), far outpacing Zix's meager single-digit growth.
Furthermore, Zix is clearly continuing to focus on email - the recent release of
ZixDLP is evidence of that. By continuing to myopically concentrate on just email - a
small segment of the overall EMM space - Zix will likely be unable to compete
against competitors which provide more complete EMM solutions. In fact, it will be
nearly impossible, considering the level of Zix's R&D/marketing budgets compared
to its rivals.
Relative valuation
At ~$50m in annual revenues and ~$28m in net cash, Zix currently trades at ~4.4x
EV/sales. In contrast, MOBL currently trades for 1.1x EV/sales (~$130m in revenue
and ~$100m in net cash). Both companies share striking similarities: they are about
the same size (~$250m) and both operate in the high-growth EMM space (though
out of the two, only MOBL seems to be benefiting from the growth trend). MOBL's

stock has been thrashed recently, largely due to weak guidance and increasing
competition. Given my above commentary regarding Zix, I see no reason Zix will not
eventually follow the path of MOBL as increasing competition would also harm Zix.
Although one might attribute the valuation discrepancy to the difference between the
company's offerings, this assertion does not hold merit. MOBL is arguably much
better positioned competitively compared to Zix, given that MOBL provides a
more complete solution (unlike Zix, it is not simply focused on email) than Zix. Due
to this, MOBL has enjoyed much higher growth rates (20%-30%) compared to Zix
(6%-10%). One can reasonably make the case that MOBL should trade at a
premium multiple to Zix, not the other way around.
One other bone of contention the reader could raise is as follows: Zix is profitable
while MOBL is not. While true, this argument does not hold water as one needs to
consider that as these companies operate in a high-growth industry, it is very likely
that they are priced basedon their growth profile, not their profitability.
I believe a reasonable base case is that Zix trades in-line with MOBL. At MOBL's
EV/sales multiple, Zix would see ~75% downside from current levels. As alluded to
above, there is no reason why Zix can't trade lower, given its weaker growth profile
and poorer competitive position.
Catalysts
The main catalyst that would push shares lower would be a continued single-digit
revenue growth rate going forward (i.e. no explosion to the top-line).
Shares of Zix rose sharply (from $3 to $5) as a result of the announced
Google/Cisco partnerships. In prior sections, I have detailed why it is highly unlikely
Zix would reap much benefit from these partnerships.
I expect continued single-digit growth in the following quarters to be proof of this and
result in investors adjusting their growth expectations for the firm, which would lead
to a drop in Zix's share price.
Risks & conclusion

• Acceleration of operations which would push shares higher - Unlikely.
Although one can credibly make the case that Zix's results would accelerate
meaningfully as a result of the Cisco/Google partnerships, the data clearly
shows that such a scenario is unlikely to materialize.
Furthermore, the acceleration of operations would have to be very pronounced
to result in shares appreciating higher (companies trading at 4.4x EV/sales
simply do not continue trading at that multiple if sales are growing at single-
digits, or even low double-digits).
• Zix gets acquired - Unlikely as well. Zix offers point products (and thus is
poorly positioned competitively). The firm is growing at single-digit rates (not
exactly a coveted growth rate to an acquirer) and is extremely small (~$250m in
market cap). Given the above, the rationale for a larger player to acquire Zix
seems weak.
The fact that Zix offers point products would not allow an acquirer to gain a
meaningful foothold into the EMM space (a more complete EMM offering would).
In addition, Zix's small revenue base and single-digit top-line growth rates would
hardly move the needle for any potential acquirer.
Further, Zix clearly trades at an elevated multiple, which is likely to deter
potential buyers. In fact, Zix's competitor, MOBL, is a much better target for an
acquirer (much higher growth rates, depressed valuation, and a much better
competitive position given its more complete EMM offering) compared to Zix.
Finally, potential acquirers such as Microsoft, VMware, IBM, and SAP already
have their own email encryption offering, making it pointless for them to acquire
what they already have.
• Continued share repurchases - while this is very likely (Zix already has an
existing share buyback program of $15m), average daily trading volumes of Zix's
shares are in excess of $2m. Thus, it would be difficult for a repurchase program
to push shares significantly higher from current levels.
Essentially, my bearish view on Zix is based on the fact that the company trades at
a sky-high valuation despite a sluggish growth profile, something that is unlikely to
continue going forward.

Its growth profile is likely to remain weak given increasing competition from very
large players (Microsoft, VMware, etc). The company's small R&D/marketing
budgets relative to the aforementioned tech giants places it at an insurmountable
disadvantage. Although management continues to be optimistic about Zix's future,
their aggressive selling of Zix's shares contradicts their upbeat comments.
With little reason for operations to accelerate, poor competitive positioning, and a
stratospheric valuation, the likelihood of Zix getting acquired is substantially
mitigated. Shares are unlikely to rise further as well for similar reasons. With limited
downside and huge upside potential (75%+), shares of Zix seem like a compelling
short.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate
any positions within the next 72 hours.
I wrote this article myself, and it expresses my own opinions. I am not receiving
compensation for it (other than from Seeking Alpha). I have no business relationship
with any company whose stock is mentioned in this article.

Short Zix Insurmountable Competition

Recommandé

Recommandé

Contenu connexe

Similaire à Short Zix Insurmountable Competition

Similaire à Short Zix Insurmountable Competition (20)

Plus de Lester Goh

Plus de Lester Goh (14)

Short Zix Insurmountable Competition