rudedog: Your interpretation of what I said is wrong. More important I don't agree with your central premise. There was nothing in the floating of Alta Vista which would have weakend COMPAQ's ability to do partnerships or leverage AV - quite the contrary. Alta Vista would have been an independent public company with COMPAQ owning a majority of the shares. Now it will be an independent company with COMPAQ owning a minority. Since when did being stronger and richer make a company weaker? What is there in owning a minority rather than a majority which affects COMPAQ's abilitity to do partnerships.
I think Rosen's intervention in this matter was penny wise and pound foolish. He wanted to save a few bucks in development costs and run to what he thought was the safety of CMGI (in fact it was a gamble) when he could have had a much bigger and surer deal with Alta Vista. The Alta Vista floatation would have provided all the here and now benefits I have listed in previous posts - none of which are penny size - as well as strengthening COMPAQ's strategic ability to do deals with the likes of CMGI or whoever in the future.
Rosen's intervention gave us a share price of $18 and a severely damaged reputation which will take another year or more to repair. With a stronger nerve from the Chairman and some strategic spending of the cash hoard, COMPAQ could by now be a much richer company, with much higher market capitalisation, a stronger brand image, with a commanding presence in the internet sector and the ability to leverage its power all over the place. Also the shareholders - those of us who own the company - would not have suffered unnecessary and stressful losses. Give me that reality over blind belief in Rosen's wimpish gamble on future benefits from CMGI or future partnerships which may or may not happen and which can, in any case, be matched by competitors.
We will never know what could have been achieved, because COMPAQ, after stating to the investment community that it would bring Alta Vista to the market in the Fall of 1999, suddenly reversed itself. I remember how you and others on this and other boards were congratulating management and the board on the wisdom of the decision to retain and develop Alta Vista. I am sure that that decision was the reason many investors came into the stock early in 1999 and the reversing of that decision the reason why so many left.
Finally, I suspect that there is an underlying inconsistency in what Rosen and you are saying. COMPAQ talks a lot about reinventing itself, the need for a company to move at internet speed, the internet being the touchstone of strategy, flexibility, change and change again. I have a suspicion that what governs your and Rosen's attitude to Alta Vista is a visceral belief that COMPAQ should hug its original mission of being a mass manufacturer of boxes, even if the boxes are smaller or bigger or joined together. When the opportunity to become a different and better kind of company was presented with Alta Vista, Rosen did not have the bottle (to use British slang). |
