Hello Hans-Erik,
<<...I still wonder what their next strategical move will be...>>
Well, if you heard the CC which I'm sure you did :-) Levy said the focus is definitely on organic growth and product development / enhancement. He said the opportunity is right there, and the biggest risk to RATL going forward is business plan execution. This basically means - IMHO - that RATL has it in their own hands how successful they can eventually become. Well, I got the impression they are still focused and fully committed, so I want to believe it.
Further, Levy pretty much ruled flat out any bigtime acquisitions. As we well remember - now we can smile when we think of it - they had lots of trouble with the Pure Atria transaction (and wasn't there another one in '96 and '97) and subsequent integration. I got the impression that painful experience is still very much on senior managements mind. So even with all the cash and high stock price they seem reluctant to play big-ticket M&A which is fine with me.
Levy did say, however, that complementary acquisitions on a smaller scale (like the Object Time back in January 2000) are possible. Object Time he said had about 100 people, and integration went well, so they could bring out a combined product after 3 months already.
My take from all this is that strategically we will not see any big shifts. Neither will we see them spending big in M&A. As I understand, RATL thinks there is still a lot of potential in their product offerings - in addition to the business becoming more service-oriented in the future. I'll take management's word for it now. I very much like that relative financial and entrepreneurial conservatism. Focus has served them well over the last 3 years. I want that to continue.
My only concern is the stock price: If RATL now becomes a real momentum stock, we'll be at $100 (post-split) by the end of the year, and subject to much brainless volatility... The days of reservation from the investing public towards RATL are pretty much over, I'm afraid.
kind greetings,
Thomas |
