Does it really matter?
Yes it does, Howard. The Street doesn't like surprises. If in-fact some of this information had been communicated to the Street prior to the earnings announcement, and prior to the quiet period precedent thereto, we wouldn't see over a 40% drop today. Instead of seeing the stock rise to the mid-30s as we did, we would have likely seen some earlier resistance and sell off, perhaps at the 30 level, and likely followed by a slow trend down to pre run up levels of the mid-20s. Maybe, just maybe, if this this had been the case, we wouldn't see price levels below 20 today.
The bottom line is the Street doesn't like surprises, and will punish a stock irrespective of the fundamentals for not coming forward with such information when it became apparent. This is an issue for management to address, and IMHO, is an area where it is deficient. It is Fenner's job as CEO to focus not only on his company's customers (markets), but also his investors and the investment community. If he can't do it alone, then he should hire someone who can engender confidence from Wall Street. His track record to date on this front, IMHO, is abysmal, and that is why investors are suffering today . . . irrespective of the underlying fundamentals.
There's more today to running a public company than responding to markets & moving product out the door; its also communicating a clear message to the Street, both long term and short term. IMHO, Fenner should seriously consider hiring someone to smooth this area out because he has not shown an ability to do so on his own. He likely has his plate full focusing on CMTO's core business, which is at a critical juncture. My advice is that he hire an expert and involve him in the day-to-day operations and charge him with responsibility of communicating material investor issues to the Street. |
