In closing, I'd simply like to add that for a long term WIND investor, this is a non-event. While there are added risks in the short term, there is also a very good chance that the company will emerge in a much stronger position.
This downturn may very well end up being a non-event for long-term WIND investors; however, there are a couple of things that worry me. First, if WIND's stock price becomes too depressed, they could become a target for some other larger company to acquire on the cheap. As a long-term investor, I would consider an acquisition as a very negative thing (even if it were, say, $60/share) since it would dilute my ability to participate in the awesome long-term profit potential I see in WIND's business.
Second, while I agree that WIND will likely come out of this stronger than their current competitors, I can also envision some factors that could hurt WIND. For example, if WIND's potential customers are trying to cut costs, might they be more likely to choose some Linux RTOS to avoid the licensing fees in the short-term (and royalties in the long-term)? Although WIND can probably argue (validly) that any Linux RTOS would actually cost more in the long-term due to fewer tools, longer time to market, etc., these sorts of factors are not always correctly factored into R&D spending decisions--especially when the decision-makers are trying to make the income statement look good for next quarter.
Another factor is simply this: the market here is still in its very early stages. Since WIND is currently the clear leader, it is to their advantage for growth to accelerate (in Gorilla Gaming terminology, "for the tornado to hit" ) as quickly as possible. Any delay in the arrival of "the tornado" is bad for WIND in the sense that it provides extra time for some potential competitor to get a foothold. [Note: My concern for WIND in this area is alleviated somewhat by the fact that they appear to have formed an extremely strong value chain.]
Disclosure: WIND is my largest holding, and I'm obviously still bullish on WIND. |
