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Technology Stocks : Vignette Corporation (VIGN)
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To: MGV who wrote (513)11/12/2000 1:24:52 PM
From: Hungry Investor  Read Replies (1) of 628
 
All,

Thanks for the recent posts. I agree that top-line revenue growth is important and in that arena VIGN is a superstar. I have (have had) concerns with the growth in expenses. The "land grab" as was mentioned is great in the scenario in which the market continues to expand as MGV mentioned. In that scenario, spending for the land grab makes sense, assuming that the profits are large if not enormous when VIGN becomes the 500 lb. gorilla. What happens if the market starts to mature or these profits are just so-so? In my experience with various companies, they are quick to increase expenses and slow to cut them even when things aren't going their way, as it is painful and people inherently don't like to admit they may not be 100% accurate in their vision (especially CEOs). I would like to have some additional discussions here surrounding this topic and will be actively engaged if others think that its worth discussing. Are we all in agreement that as long as the market for VIGN's prodcuts continue to expand at a healthy rate for the next 5-7 years (longer than the company has been in existence) either naturally or synthetically through further acquisitions that the "land-grab" and related expenses are OK as long as the company is turning cash flows as they have been over the last several quarters (I realize this last part is an additional consideration which should be analyzed separately)? Do others have differing thoughts on the subject? I understand that there will differing opinions on this issue and I am not sure myself if this thinking plays out, but as a VIGN long that has averaged down over the past nine months believing in the company and its vision, I must say that I was somewhat alarmed at the rate at which expenses have grown recently and I am concerned that I will not realize the gains that I thought were possible here.

Open for discussion.

H.I.
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