He's back...
...merely took an 8-month vacation from SI to go do other things. Still long here, but man are we dead in the water, or what?
Got caught up on the last 250 msgs here... Am not perplexed by the fact that we're languishing. The reason was brought up at the Feb annual meeting by a shareholder during the Q/A period. It has to do with management compensation and options which are overhanging the market. I don't have the annual report in front of me, but Corder's salary is about 10% (or more) of the company's profits, about $1 million of the $10 million the company cleared -- and that's before the gobs of options he and the other execs got. Since the options I think are based in the low-30s, and since 25% expire each year, the flat stock price is the market's way of voicing its disapproval, punishing the execs by making sure their options (at least some of them) expire worthless. Upside is limited if it's gonna be met with options being cashed in.
The management was very concerned about the low stock price at the meeting. The chair of the compensation committee (part of the board of directors) got up and made the standard lip movements about comparability, the need to retain top people etc. I chatted briefly with him afterwards and mentioned this overhanging options lid on the stock's price. The last 5 months of non-action have confirmed my view. Don't know if I got through. Everyone running things is doing a great job, but there's a limit to how much shareholders and the all-important potential shareholders can take when the company is still quite small in the grand scheme of things. Either salary or options, or some modest combo of both, but not tons of both.
A few options for top people is OK, but we're not a Cisco, Intel, Dell, or Microsoft (or even Disney) which can out-source its executive compensation program to the stock market. I hope this message from the market is getting through to ANLT's board. I have a copy of a resolution that has been introduced at other annual meetings which is designed to correct these situations. I'm thinking of introducing it at next year's meeting, if only for symbolic effect (since it may not have much chance of passing and will certainly be opposed by the higher-ups in the company). I don't have an electronic version for posting. It also addresses the issue of options being re-priced downwards after a big stock drop, a thorn of stockholders everywhere which has been discussed on many threads around here.
I think this also explains the huge short position. The pros can short the hell out of a stock with limited upside potential, take the $$'s and put it into something profitable, and be confident of being able to cover at little or no cost. Basically a loan which is cheaper than margin. I could be way wrong, but think that's what's happening on that front. At least it's a theory. With volume dwindling, the days-to-cover value is now around 25, putting us on the June Top-20 list, last I looked. Unless/until management does something our only salvation is for someone (or someones) with really big pockets to come in and start buying up shares by the block -- and that ain't me.
So, the exact earnings numbers don't matter too much, IMO. But, yea, the more the better...
* Chris
(P.S. - If I whisper $0.41, does that become the whisper number?) |
