First of all, I apologize for accusing you of being young. I wrongly assumed your dismissal of fundamentals meant you were inexperienced.
Okay, a few points:
Are you so certain that you understand TERN's fundamentals? Apparently with all your research you failed to anticipate that TERN would triple their revenues this past quarter and achieve operating profitability three quarters before analyst estimates. Since you can't accept the possibility that you may have been wrong, you've conjured up the accusation that TERN is in collusion with its customers, George Gilder, and any number of analysts to cook its numbers.
I'd welcome help in understanding Terayon's latest financial report, especially the following:
Excluding "a dividend of $23.9 million or 2.66 per share recorded in connection with certain equity financing," net loss was $64.1 million or ($3.11) versus $47.1 mil or (5.25) in FY'98.
I believe I'm right in suggesting this is not a one-time charge related to an acquisition or inventory write-down or restructuring of any kind, but the cost associated with warrants to secure their business with both Shaw and Rogers. As such they should be classified as costs and not pulled out as if they had nothing to do with on-going business. Pro forma numbers are used to compare apples to apples. For example if you discontinue a line of business you can show pro forma numbers which exclude the costs of those changes. This is done to show shareholders the status of your on-going business. If you've acquired a company, it's standard practice to pull those numbers out. Warrants are in another category altogether and had the cost been reported correctly, Terayon would have shown a net loss of $64.1 million or ($3.11). If you want to pretend the company tripled revenues and returned to profitability sooner than expected, it's your right. I believe it was Al Pacino in "The Insider" who said, "Never underestimate the power of denial."
<<<<However, since you don't know if I'm right or wrong, how can you pass judgment?>>>> That's exactly the point. You haven't provided any fundamental research. You've only snipped already known, public information from SEC filings and put your own spin on it. Your spin - like all spin - will reflect your own bias. In the final analysis, you don't even know if you're right or wrong.
If you excluded my spin would the SEC documents be any less revealing? As for my research, would you rather I clipped and said nothing or clipped and added commentary? One way you accuse me of not doing fundamental analysis and the other way you accuse me of spinning. As for the comment about being right or wrong, I was simply quoting what you said about yourself. I admit there's a lot I can't pin down --- Rakib refused to give any specific numbers for product groups or reveal business weightings by customer (how can you know how well proprietary modems are selling if product break-downs aren't given?) --- but the beauty of these forums is that we can work together to find the answers.
>>>>There are simply too many excellent companies out there to waste time on one with questionable ethics. <<<<<Then why are you wasting so much time?
I don't own Terayon and never have so no time wasted there. As for time spent looking through SEC documents, it's all part of a day's work. There's no way you can own any single stock without analyzing its competitors.
Let me ask you this, if you're a serious investor why would any analysis of a company's filings be a threat? Why would any parsing of the numbers be disturbing? Why would any questioning of spoken word versus written word cause concern? As a shareholder don't you want to know everything humanly possibly about your holdings?
Now, I've thrown some challenges your way: A comparison of TERN's modems with CMTO's; an analysis of the write-off for cost of warrants; a rebuttal to the DOCSIS 1.2 issue, specifically TERN's plan if S-CDMA doesn't become a core part of the standard; and finally how they plan to compete without a major US customer. If shareholders are hoping the company becomes an all-purpose supplier of DSL, video, and cable, then I submit they're playing catch-up in a crowded field with some awesome competition.
Okay, back to you. . .
And let's stick to issues. There's no need to attack me personally.
Pat |
