NCR Finally Shopping Aloha And Their Asking Prices Is LOLz

If you’re curious, no, being right all the time doesn’t get old.

It would seem NCR has finally realized it can’t build software for shit and is shopping their Aloha POS business.

We suspect the straw that broke the camel’s back was the recent $30-some million poured into R&D in an attempt to fix the debacle that is Aloha with nothing to show except a withering market share.

Fortunately for shareholders, NCR management compensation isn’t tied to performance.

How did we get here?

Aloha didn’t become the poster child for a failed business overnight. It took many years of careful, negligent pruning, and it extends prior to the incompetent leadership at NCR today.

Aloha was purchased by Radiant in 2003.

NCR then gobbled Radiant in 2011.

NCR was and is a hardware business that tried to buy itself into software relevance, but just because you paint stripes on an ass doesn’t make it a tiger.

So doing what NCR does, it failed to meaningfully invest in Aloha.

Instead, Aloha persisted as a spaghetti code of an animal, with so many versions and so many patch jobs that it became impossible to properly support.

We don’t envy the situation today’s management at NCR found themselves in, but they didn’t do themselves any favors with their overarching incompetence.

So now NCR is hocking the Aloha business unit as if it’s an asset, when it’s a massive liability.

We don’t care what revenues the Aloha business unit might be generating: buying Aloha now would be like buying Blockbuster when Netflix was already overtaking Blockbuster in market share.

Aloha has doubled down on their colonoscopy pre-op instructions and their SMB accounts are gushing to competitors.

Aloha’s largest customers realized NCR was incompetent many years ago and they forked Aloha to build and support their own versions, so those systems couldn’t even be called Aloha.

Given these facts you’d think NCR would be looking for a tax write off in donating Aloha to someone that could take care of their customers and transition them to a POS system that isn’t a massive puddle of festering diarrhea.

But alas, not when you’ve got a savant at the helm.

A genius.

A divine being.

In all his wisdom he believes Aloha is worth (wait for it…)

$8 billion dollars.

Even though NCR’s market cap is only $5.3B and enterprise value (ie market cap + all their debt) is $11B.

Somehow Aloha is worth $8B when NCR’s entire hospitality division is less than 13% of NCR’s revenue.

Woah, guys, do you see what’s happening here?

NCR is mispriced!

Only 13% of their company is clearly worth $8B.

So NCR is actually worth…

$61 billion.

OMG.

How did we get it so wrong?

NCR is worth 3x as much as Toast!

Two thirds as much as Square!

As much as FIS and Fiserv!

Mike Hayford has engineered the fastest value creation in the history of man, that fucking wizard!

But you know what?

Anyone who buys Aloha is going to realize what’s really going on here…

Aloha is a giant sack of shit.

Instead, NCR should pay someone to take Aloha.

Yes, pay someone.

Because whomever buys Aloha will need to write off half the accounts that are going to attrit to competitors in the next 12 months.

And then they’re going to need to deal with NCR’s channel, which is nothing short of a fucking disaster.

Further, they’re going to need a replacement solution to offer Aloha customers ASAP if they’re to wring anything of value from the liability that is Aloha POS.

NCR would be smart to just give Aloha to Toast in exchange for about three shares of Toast stock.

Toast gets access to some enterprise accounts and Mike Hayford can finally boast that he owns something that’s relevant (instead of being laughed out of the room when asking $8B for Aloha).

He’ll probably get a pay raise to $20M a year after such a cerebral stock maneuver, even though he’s worth about, mmm, $200M a year.

Sorry, $200B a year.

Actually, make that $200T a year.

Yea, that sounds about right for the job he’s doing over there.

Of course the acquisition of JetPay now looks stupidly expensive since there are materially fewer merchants for NCR to abuse in attaching their own payments, but anyone who’s met Mike Hayford for longer than 10 seconds would tell you the guy can’t think more than a few seconds ahead (because he ironically already knows everything).

That the dude is intimating Aloha is worth $8B is insane.

But shit, if he gets it maybe he does deserve $200T as the world’s greatest conman.

If only we were as smart as NCR’s management we might have seen this coming.