DFNN goes public - MY TWO CENTS’ WORTH by Dickson Co DFNN.COM

Diversified Financial Network Inc. went public last Oct. 30. The stock opened at P10 per share and closed at P9.60 per share on the first day. Our former Secretary of Trade and Industry Mar Roxas and the three Ramons rung the opening bell. The three Ramons were Ramon T. Garcia (president of the Philippine Stock Exchange), Ramon M. Garcia Sr. (president of Diversified Plastics Inc.) and Ramon C. Garcia Jr. (president of DFNN, son of Ramon M).

History was made; this was the first IPO (Initial Public Offering) of a Web-based IT company.

Some of our local journalists were bearish and dubbed the IPO a "flop." If the criterion was that DFNN was able to raise P149 million to execute its business plan, then the IPO was a success. However, if the criterion for IPO success was that the price should be trading at 30% to 40% above the listing price, then I have to agree that the DFNN IPO was a flop in that regard at least for the first few days of trading.

After the IPO, DFNN now has two currencies (cash and stock) to execute its business plan as an ASP (applications service provider) and solutions provider for financial institutions in the ASEAN region. However, for some of our vendors who think DFNN is now flush with cash and would now change our policy of frugality, think again. DFNN’s road to profitability is filled with potholes and humps, we have only begun the journey and we need to make this journey last as long as possible through aggressive business development and frugal and strategic spending.

My Two Cents: At the risk of sounding self-serving, I remain bullish on the stock!

* * * Typo

In my last article of Oct. 20, Mr. Jed Carlos pointed out a typographical error. Instead of $12,600, $21,600 was printed, which logically threw out my return calculation.

I apologize for this error. However, looking deeper into what could have gone wrong, I found out that when I submitted the article to my editor-in-chief, somewhere along the chain, an associate of the paper had to retype it because their system did not take in e-mail attachments.

I am sure this paper had its reasons and plans for capital expenditure and migration plans for standardized e-mail and systems integration. But just imagine the amount of efficiency and error avoidance that can be achieved when you have a fully integrated system. There are ways to achieve this without spending too much money. (Of course, the publisher would need to sit down with my consulting division.)

My Two Cents: You do not need to buy a Ferrari for a bicycle need; a Kia Pride for a bicycle need should be enough. (I was going to say Volkswagen Beetle, but the new bug is on the high end of the price scale.)

* * * Florida stalemate, juetengate et al

I may be the most apolitical person you will find, maybe to a fault. I don’t really care who is at the helm provided the person at the helm knows where he is going and how he is going to get there. A graft-free captain would be nice, too! Rarely would you find me spending the time to find whose fault it is but rather you will find me looking for who can fix it and what can be fixed. Sorry I can’t help but say something and share some of my thoughts.

IT and the Election. The use of information technology to make all the processes convenient.

In the case of eLagda.com, the signing of petitions for Erap to resign has reached more than 80,000 in just a little under three weeks. Unfortunately, the target was a million. Since Internet penetration is still less than 1 million, between home PC access, office access and Internet cafés, this is a pretty decent turnout. If we extrapolated that to the total Philippine population of approximately 75 million, then about 6 million people want Erap out.

In the case of the "butterfly ballot" of Palm Beach, there was a clear case of GIGO (garbage in, garbage out). The ballot was so confusing that the voting elderly (actually even midlifers like me) had a hard time casting their ballots accurately, ergo garbage in. Some computer experts forget the first basic rule of programming: KISS, Keep it Simple St––!!

Campaign Finance Reform. Corruption will always be there as long as you need financial resources to get elected. Your backers will always want to get their return on investment. America has this problem as well, but with better packaging. They call it lobbying or political action committees. Surely there must be lessons we can learn from Singapore and Hongkong.

Pay Market to Reduce Corruption. To get the best and brightest you need to pay market rate. When former Minister of Trade Ongpin ran the National Development Company (NDC), he managed to get the best and the brightest by paying market rate. I put forward that corruption may be reduced if: a) government employees are paid what they deserve, and b) more draconian measures of deterrence and punishment for graft and corruption are instituted. (Cutting off fingers and other extremities come to mind.)

My Two Cents: My only request to the key players of this crisis, whatever solution that you decide to use, please solve it quickly!!

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Dickson Co is CFO (C is for Cheap) of both Dfnn.com and HatchAsia.com. For comments and suggestions, e-mail [email protected].