Re: Merrill Pulls Back...
Well, let's look at some of his article:
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"Kraemer didn't return calls seeking comment. "
"The company declined to comment."
"One sell-side analyst who has spoken with sources..."
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He takes the note from Kraemer of Merrill Lynch, does his
own interpretation and doesn't wait to get comments from
Kraemer. "Didn't return calls" doesn't mean much because
Kraemer could have been at a technology conference, the
beach or whatever the afternoon that this guy called
(did he call twice, within an hour? Who knows). I think
as a journalist, I might at least get him to say "no
comment" before going forward.
"The company declined to comment": of course, NTAP isn't
going to comment on every story going to press and what
can they say anyway, they don't make the price targets the
analysts do and certainly aren't going to go around at this
time and get into that game.
"One sell-side analyst who has spoken with sources...": he
uses an un-named sell-side analyst - could we at least get
a firm name - who has sources at the company? Erh, um....
Now, this could all be factual, but traditionally one
builds one's case with checkable references.
The one named source he gets is "Mike Davey, an analyst at
New York brokerage Investec Ernst" - who? Mike says:
"The thing should have never been more than a $20 stock,
even at its peak". I guess Mike sleeps with a copy of
the Graham/Dodd "Security Analysis" under his pillow
and doesn't venture far from Protor&Gamble and GM?
If you really want to see Lepri's slantedness, look at the
title of the section on Milunovich's hand off to Kraemer
called "Le Grande Illusion". He's posturing that NTAP's
growth over the last two years was an illusion, an anomaly.
Do you believe that? I don't.
Let me tell you what you have, in a nutshell:
1. Here's the bio on Thomas Lepri from TheStreet.com:
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See: thestreet.com
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"Before joining TheStreet.com in November 1998, Lepri covered
the finance and health-care industries for Hoover's Online
in Austin, Texas. He also taught composition for three years
at the University of Texas."
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Not exactly a tech-literate background. I think he's wading
into the deep end of the tech pool here without a floatation
device. I don't blame Thomas though, he's doing his best to
be sensational because at less than $2 per TSCM share, that's
what the Street.com needs to do to keep any semblance of a
business for advertising and subscribers.
2. Merrill Lynch: whether Kraemer or Milunovich or the dear-
departed Henry Blodgett of .com-hype-fame, these guys were
off the charts on the upside, so why do we believe they are
looking out for our best interests here? I do believe
Milunovich understood the disruptive nature of NTAP's business,
but the stock price targets are day-to-day creations based on
market sentiment and Merrill's short term goals. That's true
of any of these houses. Caveat emptor.
3. NTAP is not an illusion. The company has hardware and more
importantly software, that jeopardizes even EMC's or Hitachi's
high-end solutions. Of course, until IT spending turns around,
it is easy for a "journalist" or an "analyst" to "pile on" at
this point, what can you say when your revenue/earnings have
stalled? The important point is that this is happening to
*everyone* in the industry.
My take-away: Thomas Lepri doesn't excite me as a journalist
nor as anyone that has any tech savvy. Merrill Lynch is
looking out for Merrill Lynch, not NTAP, not you and certainly
not me. NTAP has done some great things in the five, soon to
be six years it has been a public company, and I'm willing to
believe in their track record of performance, their technology
and the strength of their employees more than Thomas Lepri or
Merrill Lynch.
Have we seen anything fundamental break at NTAP? No. What
we have seen in a fundamental break in the Wall St. momentum
herd. They know how to jump on the and ride when everything
is going up, they become some confused cowpokes when they have
to actually work for a living.
IMHO, take it or leave it. |
