Art, I am glad to see Mike F. out of this stock. Apparently he never understood what ACTV does.
If you have ever read my posts, you would know that this statement is very far from the truth. I fully understand what ACTV does. My complaints have never been about what the technology could or could not do. I have had exactly 2 major complaints over the past 2-3 months.
1) The executive compensation plan is ridiculous. The management gets 2% of the increase of market cap in bonus each quarter. Originally this apalled me enough to almost sell. Then I read some SEC filings, and decided that what BS and others were doing were taking their compensation in stock, not cash (had they taken it in cash, the company could never have turned a profit; the math is in posts of mine several months back.) Taking the compensation in stock made the impact on the bottom line minimal... however right after he got his huge payday in stock, BS sold it on the open market. So the bottom line wasn't impacted, but the stock price fell. At this point, I'm no longer convinced that BS et al have "noble intentions" when it comes to their compensation. There was also that tidbit of the amendment to the plan which arrived in my mailbox after the shareholders meeting...
2) The big complaint - the lack of rollout. IATV has been promising a rollout since 4Q '96 or so, and has never delivered. I think that they have a credibility problem at this point and nobody believes them when they say they are going to rollout. I will grant you that by waiting until now they have a better shot at higher penetration, and that the costs of not rolling out in 1996 are outweighed by the benefits. However, in BS's call on Friday he said he wanted to roll out in Sep but other forces were stopping him. IMO, a delay in rollout at this point would be far more costly than delaying the 3 years to this point.
It's not the technology I have a beef with. But remember that Beta was superior to VHS in all aspects but one (recording time) and that the Apple OS was/is superior to Windows, etc. It's not always who's best, it's who makes the most of their opportunities.
I have said before that if IATV puts out a press release in the next 2 months that the rollout will occur on X day with Y programming, the stock will shoot like a rocket to $20+. All of you who hold long now will be rewarded when/if that announcement comes, and maybe I'll miss it. That's the price I will pay. Right now I think that there's enough of a question about the future rollout that IATV is dead money. And if the 2Q results come out and in the SEC filing there is a statement to the effect of "We expect the rollout to occur in 4Q99 or 1Q00" (ie another postponement) I would look for the stock to retrace to less than $10. I think the risk of the latter outweighs the reward of the former and am thus neutral. However, I wouldn't be foolish to short the stock at this point either.
-Mike |
