Why Speed Commerce Inc. Shares Stumbled Today

Is Speed Commerce's drop meaningful? Or just another movement?

Jun 3, 2014 at 6:01PM

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Speed Commerce (NASDAQ:SPDC) initially fell by nearly 23% early Tuesday, and then recovered partially to close down 9% after the company announced it has closed a private offering with institutional investors.

So what: For an aggregate purchase price of $10 million, Speed Commerce sold 3,333,333 shares of Series C preferred stock, as well as five-year warrants to purchase up to 833,333 shares of common stock at $3 per share. What's more, the Series C preferred stock will accrue cumulative dividends at an annual rate of 7%. Those dividends will be payable in cash or, at Speed Commerce's option during the first year, additional preferred shares.

Speed Commerce says the net proceeds from the offering will "be used to pay down indebtedness and for general corporate purposes."

Now what: As Speed Commerce transitions its business to a "pure-play e-commerce services provider," it needed the funds considering it had just $53,000 in cash and nearly $31 million in debt on its revolving credit line as of the end of last quarter. Shares also don't look particularly cheap trading trading around 19 times next year's expected earnings. In the end, whether Speed Commerce's efforts pan out, I can't blame the market for taking a step back given today's costly, dilutive move.

Top dividend stocks for the next decade
Why put your money to work in volatile small caps when dividend stocks simply crush their non-dividend-paying counterparts over the long term? That's beyond dispute. They also know that a well-constructed dividend portfolio creates wealth steadily, while still allowing you to sleep like a baby. Knowing how valuable such a portfolio might be, our top analysts put together a report on a group of high-yielding stocks that should be in any income investor's portfolio. To see our free report on these stocks, just click here now.

Steve Symington and The Motley Fool have no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information

Compare Brokers