American Virtual Cloud Technologies (AVCT) AVCtechnologies makes comprehensive and innovative cloud-based UCaaS (United Communications as a Service), Cybersecurity, and IT solutions simple for over 900 enterprise customers, including 350+ managed service clients. Their mission is to be the best single destination partner for the white-glove delivery of reliable and secure managed cloud services, hardware, and software.
What makes American Virtual Cloud Technologies (AVCT) special?
• Their executive team includes former executives from AT&T, Panasonic, NSORO, Vonage, MasTech, Compass, and Motorola
• As of 2019, AVCT now owns Computex, the Houston metropolitan area’s top cloud and managed services provider and the top cybersecurity player. They have been around for the past 30 years and have grown their reputation steadily while boasting a customer retention rate of over 90%.
• Computex has its own multimillion dollar (NOC) network operations centers in Houston and Minneapolis along with a security operations center (SOC) in Houston, a solutions lab for testing complex technology solutions, and three integration centers.
• They have focused their efforts on capturing the work from home movement. AVCT offers their clients a private cloud. This enables a company’s employees to access sensitive work-specific programs and data from home while offering easy interpersonal communication on a platform built with cybersecurity in mind.
• As of 8/5/2020 AVCT has acquired the Kandy platform as well as its accompanying team from Ribbon Communications. In their own words, “Kandy is a cloud-based, real-time communications platform offering proprietary UCaaS, CPaaS, and CCaaS capabilities. Kandy enables service providers, enterprises, software vendors, systems integrators, partners and developers to enrich their applications and services with real-time contextual communications, providing a more engaging user experience. With Kandy, companies of all sizes and types can quickly embed real-time communications capabilities into their existing applications and business processes.
Is now a good entry point to invest in American Virtual Cloud Technologies (AVCT)?
In early 2019, a blank check company named Pensare was on the hunt for established cloud companies with significant room to grow. In July 2019 the acquisition of a 30 year old cloud service company named Computex DID happen but it wasn’t finalized until April 2020. At the time Computex was bought for 65 million but in a recent job posting they described themselves as a “150 million+ cloud UCaaS and cybersecurity company.”
So as of July 2019, Pensare became AVCT, the owner of Computex. On 8/5/2020, AVCT shared that they will be acquiring Kandy along with its team. This led to a temporary hype which drove the roughly 4 dollar stock price to over 11.
However, the stock price plummeted on 8/14/2020 when many who had high hopes for AVCT’s first meaningful earnings date were disappointed when AVCT showed lackluster earnings. AVCT is now trading lower than it was before the Kandy news was released, which I have a hard time making sense of.
American Virtual Cloud Technologies (AVCT)’s bullish case
This could be an opportunity to get in early on a company with a proven executive team that wants to capitalize on the work from home movement. The executive team has stated publicly that aggressive expansion and acquisition of cloud computing companies will be intrinsic to their vision of becoming the best partner for the white-glove delivery of reliable and secure managed cloud services, hardware, and software. The recent Kandy acquisition is a testament to that.
American Virtual Cloud Technologies (AVCT)’s bearish case
The recent 10Q (Quarterly Report) on 8/14/2020 was disappointing to say the least. As of June 30, AVCT only boasted 101 million in total assets and total liabilities of 88 million with 46 million of that being current liabilities. This means AVCT will be fighting the headwinds of substantial debt and share dilution.
I predict AVCT as a company with all the ingredients to explode upwards in the next few years. AVCT share price is currently trading at $4.16 and warrants are trading around $0.28 (can be exercised at $11.50 with expiration in 2025).