On Friday July 8, 2011, the closing price of Qliktech's share (symbol QLIK) was $35.43. Yesterday January 6, 2012, QLIK closed with price $23.21. If you consider yesterday's price as 100% than QLIK (blue line below) lost 52% of value in just 6 months, while Dow Jones (red line below) basically lost only 2-3% :
Since Qliktech's Market Capitalization as of yesterday evening was about $1.94B, it means that Qliktech lost in last 6 month about 1 billion dollars in capitalization! That is a sad observation to make and made me wonder why it happened?
I see nothing wrong with Qlikview software, in fact everybody knows (and this blog is the prove for it) that I like Qlikview very much.
So I tried to guess for reasons (for that lost) below, but it just my guesses and I will be glad if somebody will prove me mistaken and explain to me the behavior of QLIK stock during last 6 months...
2011 supposed to be the year of Qliktech: it had successful IPO in 2010, it doubled the size of its workforce (I estimate it has more than 1000 employees by end of 2011), it sales grew almost 40% in 2011, it kept updating Qlikview and it generated a lot of interest to it's products and to Data Visualization market. In fact Qlliktech dominated its market and its marketshare is about 50% (of Data Visualization market).
So I will list below my guesses about factors which influenced QLIK stock and I do not think it was only one or 2 major factors but rather a combination of them (I may guess wrong or miss some possible reasons, please correct me):
P/E Ratio (price-to-earnings) for QLIK is 293 (and it was even higher), which may indicate that stock is overvalued and investors expectations are too high.
Company insiders (Directors and Officers) were very active lately selling their shares, which may affected the prices of QLIK shares.
56% of Qliktech's sales are coming from Europe and European market is not growing lately.
58% of Qliktech's sales are coming from existing customers and it can limit the speed of growth.
Most new hires after IPO were sales, pre-sales, marketing and other non-R&D types.
Qliktech's offices are too diversified for its size (PA, MA, Sweden etc.) and what is especially unhealthy (from my view) is that R&D resides mostly in Europe while Headquarters, marketing and other major departments reside far from R&D - in USA (mostly in Radnor, PA)
2011 turned to be a year of Tableau (as oppose to my expectation to be a year of Qlikview) and Tableau is winning the battle for mindshare with its Tableau Public web service and its free Desktop Tableau Reader, which allows to distribute Data Visualizations without any Web/Application Servers and IT personnel to be involved. Tableau is growing much faster then Qliktech and it generates a huge momentum, especially in USA, where Tableau's R&D,QA, Sales, Marketing and Support all co-reside in Seattle, WA.
Tableau has the best support for Data Sources; for example, which is important due soon to be released SQL Server 2012, Tableau has the unique ability to read Multidimensional OLAP Cubes from SQL Server Analysis Services and from local Multidimensional Cubes from PowerPivot. Qlikview so far ignored Multidimensional Cubes as data sources and I think it is a mistake.
Tableau Software, while it is 3 or 4 times smaller then Qliktech, managed to be able to have more job openings then Qliktech and many of them in R&D, which is a key for a future growth! Tableau's sales in 2011 reached $72M, workforce is 350+ now (160 of them were hired in 2011!), number of customers is more then 7000 now...
I am aware of more and more situations when Qlikview is starting to feel (and sometimes lose) a stiff competition; one of the latest cases documented (free registration may be required) here: http://searchdatamanagement.techtarget.co.uk/news/2240112678/Irish-Life-chooses-Tableau-data-visualisation-over-QlikView-Oracle and it happened in Europe, where Qlikview suppose to be stronger then competitors. My recent Data Visualization poll also has Tableau as a winner, while Qlikview only on 3rd place so far.
In case if you miss it, 2011 was successful for Spotfire too. In Q4 2011 Earnings Call Transcript, TIBCO "saw demand simply explode across" some product areas. According to TIBCO, "Spotfire grew over 50% in license revenue for the year and has doubled in the past two years". If it is true, that means Spotfire Sales actually approached $100M in 2011.
As Neil Charles noted, that Qliktech does not have transparent pricing and "Qlikview's reps are a nightmare to talk to. They want meetings; they want to know all about your business; they promise free copies of the software. What they absolutely will not do is give you a figure for how much it's going to cost to deploy the software onto x analysts' desktops and allow them to publish to a server." I tend to agree that Qliktech's pricing policies are pushing many potential customers away from Qlikview toward Tableau where almost all prices known upfront.
I hope I will wake up next morning or next week or next month or next quarter and Qliktech somehow will solve all these problems (may be perceived just by me as problems) and QLIK shares will be priced higher ($40 or above?) than today - at least it is what I wish to my Qliktech friends in new 2012...
Update on 3/2/12 evening: it looks like QLIK shares reading my blog and trying to please me: during last 2 months they regained almost $9 (more then 30%), ending the 3/2/12 session with $29.99 price and regaining more then $550M in market capitalization (qlik on chart to get full-size image of it):
I guess if QLIK will go in wrong direction again, I have to blog about it, and it will correct itself!