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Is The Cloud Computing Industry Set To Explode In 2016? Fusion Telecommunications Int’l, Inc. (FSNN), Gawk Inc (GAWK)

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In today’s world investors have many more options available than in the past. Among these options are companies focused on “the cloud”. Nasdaq stated that last year revenues for cloud services increased by 60%. On top of that, cloud computing is projected to see continued growth at a healthy rate over the next five years. If you are thinking of investing in a technology-based company, there are many upsides in doing so. By buying stock in a company who provides cloud-based services, you will have an opportunity to gain profits from the huge growth of this industry. According to a study initiated by Forrester, the cloud computing market is expected to grow from $58 billion in 2013 to more than $191 billion by 2020.

[quote]”Revenues for cloud services increased by 60%”[/quote]

NASDAQ

Which now brings us to two companies utilizing their opportunity in this rapidly growing industry. Fusion Telecommunications Int’l, Inc. (NASDAQ:FSNN), a leading provider of cloud services has recently announced it has acquired Fidelity Voice and Data. Fidelity provides cloud voice, could connectivity, security, data center and cloud storage services to almost 2,000 small, medium and large business customers throughout the United States.

The CEO of Fusion stated, “The acquisition of Fidelity brings Fusion closer to its goal of building significant scale in the fragmented but rapidly growing cloud services market. Fidelity will also contribute to Fusion’s organic growth, accelerating Fusion’s progress over the last year in expanding its business.” This past week Fusion shares were trading up almost 58% at $3.48, with an agreed analyst price target of $6.00 as well as a 52- week trading range between $1.83 to $5.43.

The potential for investors in the space continues to grow.  Look at a company like Gawk Inc (OTCMKTS:GAWK) who has already had some comparison to Fusion Telecommunications Int’l, Inc. (NASDAQ:FSNN). GAWK offers a suite of cloud communications, cloud connectivity, cloud computing, and managed cloud-based applications solutions to small, medium, and large businesses and offers domestic and international voice services to communications carriers worldwide. The company already has a presence in 21 countries and 31 cities with 16 of those cities are located in the U.S. On Nov. 17th the company announced they have acquired all assets of Connexum LLC.

This acquisition will increase Gawk Inc (OTCMKTS:GAWK) annual revenue to $6 million. GAWK reported its best quarter since it has begun traded, reporting that revenue increased by 952%. GAWK currently has a smaller market cap than Fusion at $1.8 million and has seen a 52 week trading range between $0.003-$0.125.  The stock currently trades between 0.009 and 0.02.  With such a market cap and the addition of new revenues, GAWK could certainly be on the radar of many, larger cloud companies.  Look at 2015’s Cloud M&A already!

In January, Equinix Inc (NASDAQ:EQIX) acquired Nimbo, a professional services provider that helps enterprises develop and implement hybrid cloud IT architectures. Pete Hayes, Equnix’s chief sales officer, noted that the Nimbo acquisition would allow his company “to help customers leverage Equinix Inc (NASDAQ:EQIX) unique cloud-density and Cloud Exchange value propositions and assist with the design and deployment of hybrid cloud solutions.”

J2 Global Inc (NASDAQ:JCOM) company’s Excel Micro in February acquired Nuvotera (formerly Spam Soap), a California-based email security services company and cloud services aggregator for managed service providers (MSPs) and value-added resellers (VARs). Hemi Zucker, j2 Global’s CEO, said the addition of Nuvotera could help Excel Micro extend its email security services market reach.

[quote]In April, Nokia Corporation (ADR) (NYSE:NOK) announced plans to acquire Alcatel-Lucent (ALU) in an all-share transaction valued at approximately $16.6 billion. Together, both companies will join forces “to create the foundation of seamless connectivity for people and things wherever they are,” according to Nokia. “I firmly believe that this is the right deal, with the right logic, at the right time,” Nokia Corporation (ADR) (NYSE:NOK) CEO Rajeev Suri said in a prepared statement.[/quote]

HP Inc (NYSE:HPQ)  in February signed a definitive agreement to acquire Voltage Security, a Cupertino, California-based company that provides data-centric security solutions. Art Gilliland, HP Inc (NYSE:HPQ) senior vice president and general manager of enterprise security products, said Voltage’s encryption and tokenization technology will complement HP Atalla, HP’s information security and encryption business.

[quote]In March, Proofpoint Inc (NASDAQ:PFPT) reached an agreement to acquire open source cyber threat intelligence provider Emerging Threats for approximately $40 million in cash and stock. Proofpoint Inc (NASDAQ:PFPT) CEO Gary Steele said he believes that Proofpoint and Emerging Threats together can deliver “the most timely, actionable end-to-end attack intelligence and protection available in the industry.”[/quote]

Singapore Telecommunications Limited (Singtel) in April announced it would acquire Chicago-based managed security service provider (MSSP) Trustwave for $810 million. Singtel supports more than 500 million mobile customers worldwide, and the Trustwave acquisition could help this Asian communications company capitalize on a rapidly expanding managed security services market as well.

[quote]EMC (EMC) last week agreed to pay $1.2 billion in cash to acquire cloud software and infrastructure-as-a-service (IaaS) provider Virtustream. The cloud computing and big data giant said the Virtustream acquisition enables EMC to provide additional support for its cloud-based services.[/quote]

Verizon Communications Inc. (NYSE:VZ) last month announced plans to acquire AOL, Inc. (NYSE:AOL) for $4.4 billion in cash. A Verizon spokesperson told The New York Times that the acquisition could help the company expand its video offerings and bolster its support for its Internet of Things (IOT) platform and television content distributed through the Internet.
Intel Corporation (NASDAQ:INTC) this week announced it will add Altera Corporation (NASDAQ:ALTR) to its portfolio in an all-cash deal worth approximately $16.7 billion. Intel Corporation (NASDAQ:INTC) CEO Brian Krzanich said his company plans to develop new customized, integrated products for the data center and IoT following the acquisition.
Is this the perfect place to target investments for cloud computing right now?  Small and micro cap companies have now demonstrated that they can show real value to much larger blue chip organizations.  The final question is this “Is your portfolio built to take on this kind of investment opportunity?”

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Eanings Review: Rambus Inc. (NASDAQ:RMBS), Revlon Inc (NYSE:REV)

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Revlon Inc(NYSE:REV) +2.5% after-hours after announcing that President and CEO Fabian Garcia is stepping down “to pursue other opportunities,” and Executive Vice Chair Paul Meister will oversee operations on an interim basis.

REV also says it expects Q4 revenues of $785M, below $801M from the year-earlier quarter but ahead of analyst consensus estimate of $743M, and a $60M-$80M net loss for the quarter due to a charge related to the recent tax law changes.

REV expects Q4 adjusted EBITDA of $110M-$115M vs. $115M analyst consensus.

CFO Chris Peterson also denies rumors that the company is considering a material asset transfer that would shield assets from lenders.

Rambus Inc.(NASDAQ:RMBS) shares are down 5.5% aftermarket following Q4 results that beat revenue estimates and met on EPS. In-line Q1 guidance (under ASC 605 accounting change) has revenue from $94M to $100M (consensus: $100.38M) and EPS from $0.17 to $0.23 (consensus: $0.18).

Revenue breakdown: Royalties, $77.9M (+10% Y/Y); Product, $8.5M (-27%); Contract and other revenue, $15.5M (+2%); Licensing billings, $76.6M (+18%).Key metrics: Non-GAAP operating margin, 31%; total operating expenses, $67.5M; cash and equivalents, $172.2M; cash flow from operations, $33.3M.

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ADTRAN, Inc. (NASDAQ:ADTN) Hits New Lows After Issuing disappointing Earnings Forecast

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ADTRAN, Inc.(NASDAQ:ADTN) slumped to a 52-week low after forecasting below consensus guidance for Q4, revising its revenue estimate downward  to $125M from $155M-$165M earlier and seeing EPS of ~$0.01; analysts had expected EPS of ~$0.14 and revenue of $161.2M.

ADTN also projects Q1 to come in at roughly the same as Q4, misses analyst consensus of $167.5M.

CEO Tom Stanton says Q4 results have been hurt by a merger-related review, which ADTN expects to be completed in 60-90 days, and slowdown in the spending at a domestic Tier 1 customer.

MKM Partners analyst Michael Genovese believes the customer is CenturyLink (CTL -2%), which accounted for 24% of ADTN’s total sales in 2016.

The analyst thinks the weakness should prove temporary, adding that ADTN’s performance likely will accelerate into 2019 as the company stands to benefit from 5G spending; MKM trims its ADTN target price to $25 from $27 but keeps its Buy rating.

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Big IPO Coming: Celator Pharmaceuticals Inc(NASDAQ:CPXX), Moleculin Biotech’s (MBRX)

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Today at 10am Eastern, Moleculin Biotech ticker symbol MBRX will debut on the Nasdaq stock exchange and is being considered as one of the most highly anticipated IPO’s of 2016 by the street. The excitement and anticipation is arising from many experts saying that Moleculin Biotech’s (MBRX) drug annamycin is far superior to Celator Pharmaceuticals Inc(NASDAQ:CPXX) drug daunorubicin.

CPXX which has been bought out by Jazz Pharmaceuticals plc – Ordinary Shares(NASDAQ:JAZZ) for $1.5 Billion Dollars last week, share price ran from $1.6 to $31 in 2 months. Moleculin Biotech’s share structure is a 1.5m public float Priced at $6.

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