Route1: The End Or The End Of The Beginning?

A company I’ve written about on several occasions and have even used their products at one point is Toronto based Route1. Their flagship product is called the MobiKEY which is a USB token that allows you to have secure remote access from any Windows based PC to a Windows based PC that has their host software installed. It’s cutting edge and gotten some traction in the marketplace with the Department Of Homeland Security being one of their early enterprise customers. Other US Government departments noticed and signed on too. Not to mention the Dutch Government. You’d think that would be a license to print money. Too bad it hasn’t worked out that way as I type this.

You might recall from this post that the Founder and CEO K. Andrew White got fired. That triggered a proxy fight which ended in him getting his job back, only to be replaced again. The new CEO, Tony Busseri has had a uphill battle ever since. Busseri promised investors in November 2010 that they would see that the company would grow from just under the 16,000 MobiKEY subscribers they had at the time to north of 100,000 MobiKEY subscribers. A year later, they were still just under 16,000 subscribers. So that clearly didn’t go as planned. As it stands at the moment, the stock which had been as high as $0.28 CDN a share in Oct. 2010 is currently $0.075 CDN a share. Though I will note that the company is in the process of buying back up to 10% of the common shares that are out there to boost the stock value.

I’m guessing that Mr. Busseri is feeling the heat as he said this on his Twitter account reecently. I’ve re-posted the Tweets without editing:

To those that follow me. I hear and feel your frustration re the SP and lack of a big order.

We continue to beleive that the depth and quality of our pipeline is real and growing. We continue to beleive we are very close (con’t)

(con’t) Time will ultimately prove if our technology is going to receive larger acceptance than it currently has.

We are busting our tails and I continue to strongly beleive in our plan and team.

Lastly, I know how we’re being judged. I invite you to consider all that has happened in 25 mos and all that could in the next 25 mos.

I need to learn how to spell BELIEVE 🙂

This might have something to do with unhappy investors on a website called Stockhouse. If you browse this site, there are a bunch of unhappy people there who want blood. Now, this likely isn’t the total view of how Route1 investors feel as a lot of what is on there can be considered to be vitriol. There likely are other voices such as institutional investors who are making noise as well. But in either case it’s likely not good for the company to have to deal with this noise.

So, the question is this. Is this the end of Route1, or is the best yet to come from this company? My feeling is that it needs to hit a home run of some sort to really put it on a course of success. You would think that given the client list that it has, that we shouldn’t be talking about this and we’d be saying that it is the next tech giant from Canada. Clearly that isn’t the case. I suspect the answer will come when they release their Q4-2011 financials. According to a press release from today, that should happen next Thursday. That will give investors a better idea if this is the end for Route1, of if it’s the end of the beginning.

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