How to interpret Kingese.
Here are some helpful hints to remember while listening to the conference call. Mr. King speaks with three different cadences. Most of the time his cadence is regular and measured - this is the Company line and is usually factual - with Zitel spin, of course!.
Occasionally, he just blurts out things - this is what King believes! Examples are "Maybe you shouldn't own it (Zitel stock)." Or "The (Zitel) business model is not viable". These are actual quotes from previous conference calls.
But the real gems are when he hesitates and stutters. When asked in July, "Does the MatriDigm product work today?" - Mr. King stuttered, stammered and reread the press release, but he did not answer the question. When pressed about a contract, he slowed down, and uttered the now infamous: "The contract ... is on my desk".
In July, I listened to the conference call with a member of my investment group. After the call, my friend was concerned about the contract and suggested buying some calls to protect my short position. I was grinning like the Cheshire Cat. There was no contract. Buy calls? No way! King is a simple read.
When listening to the questions, remember this: If the question is from Emerald or sounds like it is being read - it is a setup. (BTW, VCall is associated with Emerald) The most valuable information comes from hard questions - contracts, gross margins, etc. This is true for good companies too!
Have fun!
Bill |
