Pat et al:
Its obvious that you have an excellent discussion going on here. While I have not spent the time you & others have in getting into the details of TERN's statements & developments & statements by Gilder & the like, what I glean from all this is a strategy by TERN to diversify its portfolio of products offerings within the broadband sector in an effort to ensure its survivability notwithstanding its success or failure with DOSCIS certified cable modems. I think if we look far enough ahead we can see the day when the cable modem will become a commodity just like the POTS dial-up modems of a few years ago.
I believe this strategy by TERN is a shrewd one & is, IMHO, one reason for the recent run-up in stock valuation. Let's face it, the individuals running TERN are smart guys, where their smarts are not just limited to innovative technology, but also political maneuvering, & shrewd strategic planning.
Notwithstanding, comments by Mark regarding the future of cable plant was an echo of one of my first posts on this thread in response to a TERN shareholder espousing the superiority of S-CDMA technology about a year ago. At the time I viewed S-CDMA as an innovative technology that would be of great value to MSOs who either did not have the financial wherewithal to invest in an HFC upgrade, or if had the bucks, were unwilling do so due to a vision that the ROI on such an investment would be a poor one. I questioned the long term strategy of an MSO to go with S-CDMA because, just as Mark states, eventually, HFC upgrades will be ubiquitous as b-c e-commerce takes off & the ROI picture improves, even for the leastdense suburban areas now served by pure co-axial plants.
I subsequently questioned by the respondee that fiber was not necessarily the eventual solution; that the long term solution was keeping the co-axial & deploying S-CDMA. I responded, incredulously, then why is everyone laying fiber? I questioned then why are companies spending billions deepening fiber plant, be they MSO or teleco. I don't recall getting a noteworthy response.
In sum, I think in judging TERN, one needs to focus on the bigger picture, & that picture's frame goes beyond the cable modem. I think you present some convincing evidence of the present risks associated with TERN's S-CDMA cable-modem strategy. You have highlighted for readers here their effort to comply with SEC regs yet "hide the ball." This is the game we all agree to play when we invest in publicly traded companies.
TERN, IMHO, is playing its cards, & playing them well. IMHO, they know what you know, that certification of DOSCIS modem based upon S-CDMA technology in time to provide "continuity" to the MSO customer is a very risky bet at this stage of the game. Hence, they have diversified themselves into other broadband areas that are not necessarily DOSCIS dependent, but leverage S-CDMA technology.
As far as the fraud comments I've come across, the key element in any fraud allegation is "intent," or more appropriately "scienter," which includes knowledge as well as recklessness, but not negligence. Obviously, scienter is hard to prove. Hence, I think any allegations on either side of the debate should be refrained since it will get us nowhere in the substantive discussions here.
Any allegations that you are perpetrating a fraud here are without merit, and any allegations that TERN is doing so cannot be determined from the events to date. As Dan B. provided, if in-fact they submit their S-CDMA modem for DOSCIS certification & it fails, that have not made any material misrepresention to investors. You, OTOH, are astute enough to read their head-fake, & hence should be able to profit from it with either a long or short strategy. |
