Dassault: Lowered to Hold and Doing the Foundation Thing
November 13, 2015
Dassault Systèmes owns Exalead, one of the search companies forged in the white hot crucibles of the late 1990s. I did a quick check on the fortunes of Exalead, which was purchased by Dassault in 2010. I don’t hear much about Exalead, which had at the time of its acquisition some interesting technology.
What I learned in my quick check was two things. Both struck me as interesting.
First, in “Dassault Systemes Receives Consensus Rating of “Hold” from Brokerages,” I noted the “hold.” That’s one way of saying, “Yikes, we need to watch this outfit.” Some might argue that this is a vote of confidence. I, on the other hand, believe that this is one more signal that companies which have bet big on search are going to face some lean times in the months ahead. I noted this passage in the write up:
Berenberg Bank reissued a “sell” rating on shares of Dassault Systèmes in a report on Friday, September 25th. Credit Suisse restated an “outperform” rating on shares of Dassault Systèmes in a research report on Monday, September 21st. Finally, Zacks cut shares of Dassault Systèmes from a “buy” rating to a “hold” rating in a research report on Tuesday.
Second, Dassault is doing what Thomson Reuters did; that is, morph into foundationville. I am not sure what the tax advantages of this are and I am not too curious. I read in “La Fondation” that:
La Fondation Dassault Systèmes will provide grants, digital content and skill sets in virtual technologies to education and research initiatives at forward-thinking academic institutions, research institutes, museums, associations, cultural centers and other general interest organizations throughout the European Union. This support will provide greater access to 3D content, technology and simulation applications that have long been used by industry for the design, engineering and manufacturing of most of the products society relies on today. Such access can help create new learning experiences and encourage greater interest in science, math, engineering and technology disciplines among students.
From my crumbling office in rural Kentucky, this looks like a reprise of the “old” Lexis effort of providing “free access” to the Lexis online system in the hopes that future attorneys will continue to use Lexis. The free stuff goes away when the aspiring lawyer or future Uber driver passes the bar. How is that free stuff working out?
My thought is that neither of these news items does much to boost my confidence that Exalead is becoming a big revenue player at the upscaliest of the upscale French corporations.
The Exalead folks did know how to provide a great box lunch before the acquisition.
Stephen E Arnold, November 13, 2015
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