Empire Capital Partners urged the messaging-security provider to hire an investment-banking firm to explore strategic alternatives to maximize stockholder value. Hamilton-Madison Group, an adviser to Empire Capital, recently urged Tumbleweed's board to enact a business plan that will complete the transition to a channel-sales strategy by the end of the second quarter and immediately reduce operating expenses in all areas to generate operating profits and cash. Empire Capital and its affiliates have 6,613,894 shares (12.9%).

Speculative Buy - Price 2.04 on Aug. 27
by Henley and Co.
Tumbleweed provides messaging-security solutions for enterprise and government customers [in the areas of] e-mail protection, secure-file transfer/routing, and identity validation. Tumbleweed's customers include top U.S. banks...Blue Cross/Blue Shield organizations...and [the U.S. military]. With the core of TMWD's business growing 38% y/o/y...Tumbleweed has a history of losses in order to build...[which] could continue...Taking the sum-of-the-parts of [its] five revenue-producing businesses and comparing them to their private-market values...we arrive at a value of $8 per share. Market cap: $108 million.

Upgraded by Roth Capital from Hold to Buy