Hello there traders!
It has been a minute since we last talked! Thirty nine days in fact from my last IPO article. It’s been a busy day on my end to say the least, but not busy enough that I can’t squeeze out a quick IPO review for you lovely people! So here it goes!
On the docket for today is an IPO that actually came out a good 3 months ago, the very interesting company DocuSign, ticker symbol DOCU. You have probably heard of it by now as you have traversed the markets, but maybe you don’t know anything about them. That’s where I come in! Let’s talk about the signing of virtual documents!
DocuSign was founded in 2003 by a group of three and was inspired by an early stage startup specializing in the e-signatures called DocuTouch that was acquired by NetUpdate back in 2001. I think their Wikipedia page sums it up pretty well: “ DocuSign is a San Fransisco-based company that provides electronic signature technology and digital transaction management services for facilitating electronic exchanges of contracts and signed documents.” Most basically, DocuSign let’s users and customers sign documents and contracts online without necessarily being physically present. What a game changer! After having used DocuSign ourselves, I wonder how we ever lived without it before. Kind of like when I am thinking back to how we ever lived without GPS and phone. I mean an actual map?!
So how does it work, Ashley? How are electronic signatures legally binding? How does a company that works online manage fraud? They manage it quite well, good people of the internet. Did you know that Digital signature technology or PKI was actually invented almost 50 years ago, in the 1970’s as a way to tackle the issue of sending secure, “uncrackable” messages? Needless to say they have had plenty of time to get all of their ducks in order. Like most technologies it’s interesting that we as consumers are just now starting to see them come to light, as they have been around for years! In terms of legality, it is definitely as legal as they come. They abide by and even exceed the ESIGN Act and the Uniform Electronic Transactions Act (in the United States at least). But they also have hundreds of millions of users in over 180 countries too and meet all of those foreign standards too!
And to battle fraud they implement PKI. PKI stands for public key infrastructure which in it’s easiest form is a way of access control. The idea of access control is to ensure that only people with the required security privileges are allowed access to information or in our case access and sign documents. Access is controlled though public and private key pairs. (I see a future potential for Cryptocurrency here in the future!)
Each year that passes, DocuSign chugs onward towards the road to profitability. This past year DocuSign's revenue jumped 36% to the tune of $518 million dollars, while net losses fell from $115 million to $53 million. A drop of almost 76%! Just think about the possibilities that lie ahead.
DOCU operates on a subscription based model to generate profits. Which means users pay either a monthly or yearly subscription. A freemium tier is available but beyond that, paid subscriptions can be as simple or in depth as you choose. Anything from the basic sending of E-documents and mobile app, to comments, branding, API, and payment collection. While companies all across the board utilize their services, DOCU is particularly popular amongst realtors. In fact, when Jerremy and I were putting in offers last year for houses, we "signed" many-a-DocuSign documents! There are a few worthy competitors in the e-signature arena, a few of which you may have heard of including: Adobe Sign, Authentisign, HelloSign, and more. I do remember using Authentisign when I onboarded at my previous job at the bank, and I do recall it being a fine service, but not at user friendly and intuitive as DocuSign. While researching these other companies the Adobe Sign and HelloSign were almost 100% comparable to DocuSign in which even the prices were only off by a small amount. Benefits and features appear to be identical as well. Which, like a little birdie mentioned in the past, AKA Jerremy Newsome, Adobe would be a great candidate to buy them out in the future! HelloSign has the added bonus of an ultra sleek interface. However, none of DocuSigns competitors are even traded on the stock market except for Adobe.
With only around 50 candles on the chart, there is limited information to work with. But that doesn't mean it's not trade-able. For DOCU, I am going back to the basics, a simple limit buy at our friend the support line. Kind of like this. That Natural S curve is looking tasty and I anticipate DOCU still has some climbing to do before we see some distributing. But time will tell.
That's all for now folks. I hope you enjoyed this IPO article! I have a blast writing them, so I hope you at least have half as much fun reading them! If you have any questions please send me an email at firstname.lastname@example.org :)