MSTG...
the recent pullback
is more than likely due to a combination
of market malaise, low volume, and day traders.
if you
take a closer look, you may notice
MSTG generally responds bullishly to healthy volume.
lately,
there has been a significant slowdown;
it almost looks like tired trading...
in other words,
i see no "real" explanation for the weakness.
some substance follows, courtesy of "jimMac" @ raging bull.
[ the si thread has never been an active one...]
By: JimMac
Reply To: 114 by jtaylor118 Tuesday, 8 Jun 1999 at 5:28 PM EDT
Post # of 120
I attended the annual meeting yesterday and following are some notes, comments, etc.
1. About the market - he believes, as do I, that there is enormous potential for their product. Primarily companies are being reactive vs. proactive in that Value Added Resellers (VAR's) & System Integrators (SI's) are calling MSTG once they are experiencing a problem with email management and requesting a solution. MSTG is seeking to educate prospective customers about what they need and are learning themselves what customers need.
2. About sales force/strategy - MSTG is maintaining contacts with VAR's & SI's but is branching out to their own sales offices, Chicago & Washington. They plan on putting strategic offices in all major cities/markets. This will give them their own distribution channel, to tell their own story. Again, not relying on GSTI, which is a good deal, but also going out on their own. This somewhat ties into item 1.
3. About their turnaround - MSTG's primary goal was to achieve profitability. This was due to employee (asset) happiness and security. Now they are looking to expand sales, and spending some to do so. MSTG currently has "several thousand leads" and it is difficult getting around to everyone. Jim said that they are making United and American rich with the travel. This goes along with item 2. He was home only a few days in the past two months, with lots of travel servicing leads.
4. About Income stream - MSTG not only sells the software but also has a variety of service agreements that represent ongoing revenue streams. MSTG has a Services Group to maintain this ongoing relationship.
5. Miscellaneous Stuff - MSTG has more installed sites (200) than their nearest competitor (100). Utilizing Knowledge Link to provide web access to FAQ's to a clients customers (re: Iomega deal). This provides email avoidance. IMC has a new version in beta and is expected to be out in August. Primarily handling inbound but also is looking at auto responding to out bound email.
6. How MSTG justifies - If a customer service rep can handle 75 emails a day, at $40,000/yr (burden and all) and MSTG can provide the software, etc. to supplant this individual at $30,000 then in less than a year the software has paid itself off.
7. Scalability - MSTG's highest use customer currently handles about 15K/day. There is no issue of scaling IMC to handle more, just increase number of servers. MSTG is looking to what customers' want/may need, i.e. providing packages and customer support for Oracle, SQL, etc.
Stock Value (were you wondering if I was ever going to get to this)
1. It was asked if any company was interested in purchasing MSTG. Jim said that they had some sniffs and that the board is open to a merger and/or acquisition if everything looks good. His opinion is that the sniffees are waiting to see how MSTG will do. He thinks that companies are still not aware or know what size the market will be for this type of product.
2. MSTG is trying to get analyst coverage of the stock. They recently had a conference call with 15 analyst and had another scheduled for yesterday. One of the goals/measurements for the Investor Relations company is getting analyst coverage. They are visiting, face to face, with 5 analyst/week. Another measurement is getting the daily volume to at least 200,000 per day. He pointed out that last years average was 10,000 and this year it is 50,000. This is improvement.
My thoughts - (if you care)
I am long on this stock. I think that they are on the cutting edge of a developing market and they have a good product and name recognition among the people who are interested in email management products. As more & more companies and more and more people start dealing with companies over the web companies will see the need for email management. It has the potential to be an enormous market and even a small percentage of it could be very nice. But I think MSTG will not get a small percentage but a big one. Jim and the rest of the board have a lot of confidence in their product and company. The IR firm has only been onboard approximately 2 months and in time I believe they will get the recognition.
I believe that this answered most if not all the questions that were posted on this board earlier. If not, post again and I will attempt to answer.
STAY THE COURSE!
Jim
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