John,
Another day of Nasdaq up and WIND down. I and I am sure many others share your frustration. I was going to write something myself but I don't think I could put it any better than Matt Belkin did on his thread. Here's what he posted.
Regards
JC.
*************************************************
Clearly Wind's recent market performance has been frustrating for all of us
shareholders. It's easy to point fingers in times like these, particularly
when company communications have been poor and results anything but
consistent. I would first note that Wind has taken several important steps
forward in recent months, including: 1) first ever analyst day, 2) new
analyst coverage, 3) new MIPS center of excellence announced (something the
Street has yet to grasp the significance of), 4) the beta release of Cirrus,
5) the beta release of Stratus, 6) hardware/EST support for ARM, MIPS,
Hitachi, 7) establishment of a venture fund, 8) extended Intel relationship
via Applied Computing Program participation, and 9) beta shipment of Tornado
for Internet Appliances. Given the magnitude of the integration task
weighing on management's shoulders, let me be the first to congratulate them
on a job well done.
Now that said, Wind has also taken several steps back - and as I've
discussed with management in the past, some of these may appear entirely
trivial, yet they often carry the most severe market-related consequences.
1) lack of business reporting consistency, 2) significant insider selling
amidst one of the most significant transition periods in Wind history, 3)
lack of effective press relations, 4) poor external marketing, 5) poor
communication with investment community. Taken as a whole, these issues
should have little to no impact on the short-term operational soundness of a
business. Granted poor marketing and communication will invariably
compromise the value of any company, but again, in the short-term, I see
little operational vulnerability in a situation like this. I have to
believe Wind management agrees since that seems to be their current
executive strategy.
The problem is however, that these very issues weigh enormously on the
investment community -- me, you, fund managers, short sellers, investment
analysts, etc. It is our demand for an issue that determines the price of
that issue and with over 5,000 public market stocks to choose from in the
U.S. alone, why take the risk of investing in a company that operates in a
black box 10 months out of the year? Not to mention that same company
operates in a highly volatile technology arena where competitive advantage
and barriers to entry can evaporate overnight!
So folks, my point is this - Wind (whether they are currently capable of
communicating this to investors or not), offers all of us a fantastic
opportunity to get in on the ground floor of one of the most explosive
growth industries EVER. Barriers to entry are high, and increasingly
fortified as Wind acquires and assimilates otherwise disparate market
leaders. The brand and technology franchise are uncontested among customers
and quite frankly, that's probably the most importance asset in Wind River's
possession today. There are dozens of reasons to believe in the long-term
viability of Wind as a company and the embedded systems/advanced appliance
market as a whole. However, until the aforementioned issues are addressed -
competently - investors will shy away from the story and put their faith in
other, MORE TRANSPARENT companies. The stock will trade horizontally or
even down as it is now until this slow bleeding is stopped.
So in closing I would say to all of you - including the many Wind River
employees and management who belong to this group - let us acknowledge our
shortcomings (I'd start with the above list), put together a plan of action
to remedy them, and take a constructive step forward to extending and
maximizing the value of our market dominance, technology assets, and brand
to excel as both a corporation and public entity.
Matt |
