Live Person

Industry Sector: Software as a Service/ Hosted Software

Background
Genesis Select was retained by LivePerson, Inc. in December of 2002 upon a referral from the company’s largest institutional holder. LivePerson, whose stock went public in April 2000 at $8 per share in an offering managed by Chase Securities Inc., Thomas Weisel Partners LLC, and PaineWebber Incorporated, had seen its share value decimated by the dot com equity implosion. In December of 2002, the stock fell to 11 cents with fewer than 25,000 shares traded daily and had a current market cap of approximately $18 Million. The Company then restructured itself and developed Live Chat, the market-leading product in the emerging category of Software as a Service (SaaS), which produced predictable recurring revenues and significant improvements in online conversion rates of the Company’s Enterprise and Small Business Customers (SMB).

The Genesis Approach
Now that “irrational exuberance” had left the markets, Genesis Select’s goal was to formulate an investor presentation that would highlight the successes the company had to date, and personify the company as one of the early dot com survivors that was valued inefficiently compared to many of its SaaS peers. In doing this Genesis Select was tasked with building a foundation of institutional research coverage and institutional ownership of LivePerson. The company had a variety of patented and proprietary technologies in the burgeoning Click To Chat and Proactive Chat spaces, which offer not only a better solutions but also materially less expensive solutions to the traditional phone-centric, call-center approach. Genesis Select understood that sophisticated institutional players would recognize the inherent value in the story if the right audience could be identified in very difficult capital market conditions.

The Genesis Effect
Within three months, Genesis Select was able to make a profound impact for LivePerson shareholders. The team identified an initial group of five analysts who cover small/micro/nano cap stocks and set up several dozen non-deal road shows for management. The thesis and undervalued metric were immediately recognized and the company not only picked up three analysts in the first six months but the stock price also more than tripled. Over the course of the next four years, the list of analysts increased to 10, while the number of market cap research analysts covering the company rose from zero to eight. The market capitalization improved from $18 million to over $250 million creating over $200 million in increased shareholder value. Finally the institutional ownership improved from two holders with 44 percent of LivePerson shares, to 90 institutions holding nearly 80 percent shares outstanding, and average daily trading volume increased dramatically to close 250,000 shares per day.

Genesis Select is still engaged by LivePerson, and consults on further improving the messaging to add more Tier 1 analysts and household institutional names. We take great pride in helping shape the company’s message and image to Wall Street, replacing the misperception in the investment community that LivePerson was merely a chat company, and aiding in the thesis that the company is one of the dominant players in the online conversion channel.