WANdisco (LON: WAND) shares are up 6.7% in London. The WAND share price rise is on the announcement of a new contract. No, no, don’t start running for the door like that. They’ve actually named the customer this time - something that we can probably expect them to keep doing too given past events. The big secret at WANdisco being that they do in fact have a nice little tool there. There’s emphasis on both the nice and also the little though. As opposed to what we were being led to believe that some time back.
The announcement: “WANdisco plc (LSE: WAND), the data activation platform, today announced that General Motors signed a master license agreement with WANdisco as a new customer to move petabyte-scale data to the Microsoft Azure Cloud using WANdisco Data Migrator for Azure. The agreement, signifying a significant working relationship with GM, enables continuous data movement through the use of WANdisco software and services over a number of different use cases to be transacted through the Microsoft Azure Marketplace. The first phase of the relationship sees GM committing to moving at least 3.3PB of data with a contract value of over $400,000.W That’s a nice little contract there. But again, there’s that emphasis on little. Nothing wrong with it at all but it’s not quite the all conquering hero taking over the world. It’s simply a nice little contract.
WANdisco share price from Google Finance
That collapse we can see there, that was all about announcements of contracts that, well, turned out not to be contracts at WANdisco: “That story has been changing a bit over time too. It started with perhaps the one individual overstating sales: “ significant, sophisticated and potentially fraudulent irregularities with regard to received purchase orders and related revenue and bookings, as represented by one senior sales employee, have been discovered.” The result of that was that perhaps sales had in fact only been $9 million, not $24 million as reported. That seriously impacts the cash position and so on. Worries - and at this point it is all worries, thoughts, rumours and so on - have expanded from that into wondering whether there're more gremlins in those accounts. How much of the past is true at all in fact?”
There was then the suspension and relisting of WAND shares: “WANdisco (LON: WANdisco) shares are down an incredible 96% in London this morning. The WAND share price collapse has long been obvious, something that was definitely going to happen. The only question was when - that is, when would the shares be relisted so that it was possible for the price to fall like this? The background problem was simply that we'd all been told fables about what was happening within the company. The problem with financial fables is that at some point the cash has to turn up on the books. When it doesn't then some explanations are required. And that is, to a certain level of accuracy, simply what happened here.”
Winning a contract with GM is a good thing for that new and slimline WANdisco. But we would expect all future customers to be named - so that, you know, it can be checked?