M c I n t i r e I n v e s t m e n t I n s t i t u t e1

McIntire Investment InstituteAt the University of Virginia

LivePerson(NASDAQ:LPSN)

Prepared by Connor Davis| 17 February 2012

M c I n t i r e I n v e s t m e n t I n s t i t u t e

• Business Overview

• Stock Chart

• Thesis Points

• Market Misperceptions

• VAR

• Risks

• Recommendation

2

Agenda

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Business Overview

Online chat/customer service solutions

Uses real-time assistance to offer advice, facilitate sales

Contracts companies such as IBM, Cisco, HP, Microsoft

Obtains customer information useful to corporation

Lowers operating costs for corporations• (multiple support at once)

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Stock Chart

Share Price: $15.43 52 Week Range: $9.18-$15.59Market Cap: 821.78M Earnings Growth: +16%EPS: .22 Long-Term Debt: 0P/E (ttm): 71.08

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Thesis Points

• Strong Growth Potential

• E-Commerce On the Rise

• Leader in Industry– Customer Satisfaction

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Thesis 1: Strong Growth Potential

• Profit Margins Rising– 41%Net Income Increase from Q4 2010-2011– Net Income 12.04 Million up from 9.26 Million in 2010

(30% Increase)

• Sustainability– Added 25 New Customers– Beginning International Expansion (Untapped Market)

• Gaining Larger Market Share– Increased Brand Recognition

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Thesis 1: Strong Growth Potential

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Thesis 1: Strong Growth Potential

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Thesis 2: E-Commerce On the Rise

• E-Commerce Sales Rising– Internet sales growing at a rate of 19.4%

• Expansion Into New Industries– Healthcare, Insurance, Energy companies

beginning to use online support• Opens Opportunities for Acquisitions

– Many new start-ups with advanced technology ready to be acquired (history of acquisitions)

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Thesis 2: E-Commerce On the Rise

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Thesis 3: Leader in Industry

• Established frontrunner in a relatively new industry

• Customer Satisfaction increase for corporations

• Increasing conversions of sales, online transactions

• New technology – facts about users, continuing chat, QR codes

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Thesis 3: Leader in Industry

Awards

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Misperceptions

Tech Bubble• Online Support/Chat fad

Not as technologically advanced• Lacks certain features

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VAR

• LivePerson sales representative: “Open API being implemented”– Allows for third parties to create applications for and

integrate with software to bring new features• Analyst at Motley Fool: “Consumers may have

overreacted to the earnings results”– “Rally was overdone.”– “Small stocks with light volume are inherently more

volatile.”

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Risks/Signs We Could Be Wrong

• LivePerson’s competitors could begin incorporating new technologies that LivePersonalready utilizes

• If the global economy goes down, corporations may be less inclined to try out new services

• UPDATE: LivePerson’s stock jumped almost 25% amid recent earnings, so could be overvalued

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Trends to Monitor

• LivePerson’s Open API technology – if more and more companies begin using it

• Global economy – could signify greater desire for cost-savings• LivePerson’s stock price, if goes back down near previous close

of $12-$14 (better value)

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Recommendation

Continue monitoring LivePerson’sstock

If stock price falls below $14, initiate a purchase at 2.5%

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Questions?