Interesting news comes almost daily. These cannot be used to deduce the Q2 result or the full-year result, but a lot is happening right now.
Microsoft products out of use: Denmark protects itself from US arbitrariness | Tivi
Google attacks the Finnish cybersecurity market – Starts business with DNA | Tivi
Let’s see what kind of snowball effect and farce will emerge from these Microsoft cases.
Usually, it just keeps going, with one leading and the other following.
Microsoft would now really need Mikko Hyppönen to save the situation, preferably sabotaging all EU digital sovereignty projects at the same time.
Will Withsecure benefit from the snowball effect?
If the flat earth theory is close to one’s heart and serves as the pillars of faith, one will always find “facts” that it certainly won’t benefit.
Whether Withsecure will benefit from the ongoing disruption remains to be seen. In fact, both news items I shared seem to be negative for Withsecure in the short term. In any case, the Danish Ministry of Digitalization’s decision to start moving away from Microsoft products is an indication that the disruption is truly underway and much faster than one would have thought.
Since almost all European cybersecurity companies have already been sold to American tech giants, Withsecure is in an excellent strategic position. Everyone probably agrees on this? How Withsecure can benefit from this in the short or long term is then more difficult to assess. As an investor, however, one can think that this strategic asset can be acquired at a 1.3 EV/S multiple and an absolute valuation of 170 million euros from the Helsinki stock exchange.
I was also thinking about the possibility of a corporate arrangement. There is a great need for a native platform company in Europe, and I wouldn’t be surprised if someone was already envisioning one. I can’t say how such a thing would come about, but cybersecurity would be an essential part of it. Private equity investors might be interested in an affordably priced European cybersecurity company like Withsecure. A hostile takeover attempt could also be possible.
The mere affordable valuation should attract suitors, and why not hostile ones, as happened with Rovio just over two years ago. Ultimately, Rovio was sold to Japan, but it all started with a hostile bid. I myself have not believed in the sale of Withsecure, as I have understood that Siilasmaa, as founder and largest owner, has not wanted it. If Withsecure were to receive a hostile bid, for example, at a price of 2 euros per share, it would still be an affordable price for a long-term new owner who sees strategic value in Withsecure. How could Siilasmaa explain to his fellow investors that this offer should not be accepted?
In my opinion, the probability of an arrangement has thus significantly increased. I’m not saying, however, that it would be the only reason to invest in Withsecure. It is worth considering the company’s true value amidst the disruption, rather than the decimals of one quarter’s growth percentage. Of course, I also closely follow the results of upcoming quarters, but with the big picture in mind at the same time.
According to old wisdom, in technological disruptions, the speed of change is overestimated, and the magnitude of change is underestimated. The CEO also seemed to quote this wisdom in SHERE’s closing remarks. The Danish example shows that this time, the speed of change might also be underestimated.
"In the first block trade, 743,671 shares changed hands at a price of 0.984 euros per share, which brings the total value of the block to 731,772 euros. This corresponds to approximately 0.4 percent of the company’s outstanding shares.
In the second block trade, announced less than 15 minutes later, 1,000,000 shares changed hands at a price of 0.984 per share, making the total value of the block 984,000 euros. This corresponds to 0.6 percent of the company’s outstanding shares."
Mutual Insurance Company Kaleva 1 744 957
Kaleva sold off its assets, interesting who bought them.
Basically, the price level is now attractive purely from the perspective of potential corporate arrangements.
Pure guess, the buyer is Propius Partner. Propius already has a large holding, and with this, they acquired a substantial additional stake all at once.
Two block trades in Withsecure: 300,000 pcs and 151,709 pcs. Both slightly over one euro.
ws is starting to feel good. Perhaps it indicates belief in the Q2 results.
Of course, on the other hand, someone is always willing to give up their shares at that price. However, I will follow the situation with interest as a shareholder!
Paywall, but it likely relates to potential and opportunities, also for WS
It very much looks like the ketchup bottle cap is open for many.
By mid-June, top management already knows quite well what H1 looks like, and no negative news has been heard, even though it was already hinted somewhere that there might be a slight risk of this.
We still have to wait a moment for the results, and of course, I’m waiting for preliminary sentiments on the forum.
Atte will probably update something in 2-3 weeks, won’t he?
What kind of expectations do others have?
I myself am waiting for an improvement.
I believe it will continue pretty much the same way as before, meaning small growth. Perhaps there has been enough positive news lately, etc., that management might also send some positive message about the future.
Now that the 5% of each NATO country’s GDP for defense spending was approved at the NATO meeting, and 1.5% of that is defense-supporting funding or other security expenses, one would think that WithSecure would also have its own share to claim in cybersecurity among all NATO countries.
1.5%, could it be 500-600 billion?
It would be quite peculiar if cybersecurity were not considered at all in Europe’s preparedness and independence.
The means are there, the potential is there… but the results are missing.
Let’s see how the numbers start to develop.
All the work done by WS, the turnaround in profitability, geopolitics, NATO, Trump, digital sovereignty, and the remaining 12 other things support that there are opportunities.
At least it’s positive that the outlook is kept unchanged.
This sounds like positive news to me. At least I personally felt that the “worst” is now behind us, all unprofitable businesses have been phased out, and now the focus is on making a profit.