GXS IPO face a Sisyphus-Like Uphill Trial

11/13/2013

Editor’s note: As everyone knows by now, GXS will not IPO, but will be sold off at a discount off book value, to the OpenText Corporation of Waterloo, ON,┬áCanada. This is not the optimal outcome sought by the PE Fund’s investors, as the reported distribution is quite near the original investment of the Three PE Funds. A Token $100M USD will be sprinkled among the fund’s accredited investors, who have had their money tied up for over ten years by an underperforming GXS – a GXS that should have been able to run the table while building a brand and positive sentiment. But alas…..they are now the property of OpenText, a company that runs a tight ship, and one that is not at all shy of sweeping out an entire C-Suite….people, pencil holders, and all.

The old article follows:

Many Obstacles are being placed in front of a GXS IPO, the e-commerce giant’s PE masters are finding.

The underwriters who would normally be approached to take the issue to the exchanges, are reluctant to underwrite the offering, ‘due to underlying weaknesses in the company’s revenues, considering the length of time the venture has been operational’. My sources are cited here, mostly analysts at the investment banks.

Could the GXS shenanigans with VAN interconnects, more properly termed, ‘reciprocal message traffic exchange agreements’, particularly in regards to Loren Data Corp, the subsequent antitrust case, and the plethora of half-truths spouted by the GXS mouthpieces also be a factor in the underwriters reluctance to take the issue to the public exchanges?

In my personal opinion, yes; several inaccurate statements have been made by GXS product manager Steve Kiefer, regarding legal cost recovery of GXS from Loren Data Corp – perhaps GXS council should explain to Mr. Kiefer, that under the American system of Justice, costs are awarded only in the case of a verdict, or Judicial finding, and subsequent Judicial execution. Being unsuccessful in the process of bringing motions does not obligate a plaintiff for the defendant’s costs.

There is more disinformation: such as the daisy-chaining ersatz term-of-art, which any network engineer recognizes as claptrap. There is the dropped hint that GXS is owed back billing, again, claptrap, and actually, the case is the reverse. GXS owes Loren Data Corp. (for services rendered to GXS in 2008-09) connecting the GXS VANs to the Defense Logistics Agency, GXS stopped paying and never owned up to their debt.

But it is particularly the act of causing industry-wide disruption, in announcing their intention not to conduct and carry traffic to and from ECGrid, the ultra-proven, ultra-uptime, ultra reliable VAN used by┬áLoren Data Corp’s premier client, SPS Commerce (the true target of all GXS adverse actions), that has caused the investment banks to balk at a GXS IPO. Continue reading

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