Top 10 Worst Performing Software Stocks of 2005

The competition was fierce, the nominees were numerous, but in the end 10 lucky stocks finally won out to become The Worst Performing Software Stocks of 2005.  There was no clear theme among the losers other than "there is no excuse for not making money and if you are not making money at least don't spend it like a bunch of drunken sailors."

To qualify for this year's race all a firm had to do was start the year with at least $50M in market cap and focus its business on trying to sell software.

And the winners are:

1. Citadel Security Systems
   Price Change: -88.1% Ticker:CDSS
   Comment: Provider of threat detection security software apparently didn't detect the threat all those losses had to its balance sheet.  Investors punished the stock accordingly.  Look for a quick sale in 2006.
2. Broadvision
   Price Change: -82.2% Ticker:BVSN
   Comment: A failed private buyout combined with continued losses and an upside down balance sheet have pushed this web software pioneer to the brink of filing Chapter 11.  Some kind of restructuring has to take place in '06 if this company is going to survive.
3. Motive
   Price Change: -72.8% Ticker: MOTV
   Comment:  Investors were highly motivated to sell this stock when it continued to disappoint throughout 2006 thanks to saturation in its core markets.
   
4. Emerge Interactive
   Price Change: -72.3% Ticker: EMRG
   Comment: This developer of supply chain software for the cattle industry is headed for the slaughterhouse shortly unless it can scare up some more revenue pronto.
5. Authentidate
   Price Change: -68.8% Ticker: ADAT
   Comment: This provider of digital watermarking and a few other random technologies finds itself trading close to tangible book after 3 years of increasing losses and no clear strategy to reverse them.
6. Innodata Isogen
   Price Change: -71.8% Ticker: ARBX
   Comment: Content management company has seen stock price slide along with revenues.
7. Viewpoint
   Price Change: -64.1% Ticker: SNDA
   Comment: Provider of 3D "internet marketing technology" software that apparently isn't visualizing how to sell very well these days.
   
8. VerticalNet
   Price Change: -64.0% Ticker: VERT
   Comment: Just another amazing effort by the team at VERT.  After 2000's 95.9% decline and 2002's 94.4% decline, it's just amazing to see them turn in another Top 10 performance.  They deserve a lifetime achievement award.
9. ActiveCard
   Price Change: -60.8% Ticker: ACTI
   Comment: Provider of security tokens with a $150M in cash and a market cap just barely above tangible net worth.  My guess is if they stopped spending cash and started growing revenues things might be different.
10. Ariba
    Price Change: -55.7% Ticker: ARBA
    Comment: Pioneer of spend management software got the market's answer on whether or not its merger with FreeMarkets was a good idea.  The answer was "no".