RTT AG, the big lie - Update

RTT AG, the big lie. Update

RTT AG had a 2010 financial year better than the other years. But in fact, this result doesn’t reflect a sustainable business growth: RTT AG made a deal of four million EUR with Audi for an unlimited POS license deal.

Apart from the fact Audi could not amortize this investment (markets in Europe and worldwide are refusing to use RTT DeltaGen SW as too expensive and too buggy), this one shot deal is concerning.

First because DeltaGen is not the benchmark anymore: Audi dealers are refusing to use it.

Second because if RTT AG did not get this deal, EBITDA for 2010 were only three million EUR, and revenues before tax less than one million EUR.

If these results are corroborated with 2011 early figures, RTT AG profitability should decrease and come back to previous years level, an unacceptable level for a SW company.

If it were the case, venture capital investors would probably try to sell their stocks, but not in the rush to avoid panic and important loses.

It is more probable to see those investors leaving and selling their stocks on a one or two year base. Balderton Capital and Siemens Venture Capital are already light weighting their investment compared with last year.

Another sign is the announce of RTT AG to purchase its stocks in the next three years.

Free float could absorb some of the stocks sold by institutional investors but it is not a good sign to see venture capitalists to leave a SW company like this.

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