Here's an interesting read I found on a wireless company run by Don Listwin, former VP at CSCO. Would CSCO or MSFT want to take out OPWV?:
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February 13, 2001
6:40 p.m. EST
THE TIDE IS COMING IN - IS OPENWAVE READY TO ROLL?
New York (Jackson & Steinburger) - Some CEO's merely talk about their stock being a bargain at current prices, but here's a CEO of a market-leading wireless software company who backs up what he says with some serious cash.
Last Wednesday, February 6, 2002 at the Annual Goldman Sachs Technology Symposium, OpenWave CEO Don Listwin delivered a rationally upbeat presentation about his wireless software company, OpenWave Systems, Inc. (Nasdaq: OPWV).
His concluding remarks were: "At $5 to $6 bucks a share, as soon as I'm unlocked, I'm going to be in the market..." (to buy OPWV shares).
The "unlocked" comment refers to the fact that there are times when insiders are restricted from buying shares.
According to a SEC Form-4 filed today, the OpenWave CEO did just that: He bought 100,000 shares of OPWV at $6.35 per share on Monday February 4th for a mere $635,000.
In November 2001, he picked up another 50,000 shares of OPWV at $7.84 for a mere $392,000. Prior to these two purchases, he held 439,000 shares of OPWV. So he has increased his stake by a hefty 34% at a cost of $1,027,000. That is some serious cash.
Four days after Mr. Listwin bought shares in November, OPWV traded up 23%.
Conventional wisdom on the Street says, "Insider buys hold more weight than insider sells."
And, in fact, statistics do prove that insider buys have significantly more predictive value than insider sells.
Why? Well there are numerous reasons for an insider to sell shares in his company that do not indicate troubles ahead for the company:
• need cash for large purchase like a home or boat, etc
• divorce or other family emergency
• diversification of investments
However, insider buys mean the insider perceives his investment in his company to be timely: The price is unnecessarily low, as is the risk, in his opinion.
Since we're on the outside, all we see is the SEC Form-4 stating the insider bought and we can extrapolate reasons why.
So what might be the reasons why Listwin, a former VP at Cisco, might want to buy OPWV shares?
• OpenWave's book value is about $5.73 per share as of the December 2001 quarter, but this includes significant goodwill, which, if excluded, yields a tangible book value of $2.61 per share. So at $6.69 per share, you're able to buy OpenWave's technology, partnerships, and future potential for a mere $4.08 per share.
• With cash & equivalents of almost a third of a billion dollars, the company appears to have enough cash to stay in business for 28 or more quarters, or 7 years. Yet they are projecting profitability in a quarter or two, so cash burn would rapidly become irrelevant.
• OpenWave commands a leading share (60%) of the mobile wireless infrastructure software market which includes internet browsers and gateways for data-enabled wireless phones.
• OpenWave has 6 trials unified messaging and instant messenger with prospects, for which some wins may be announced this quarter.
• OpenWave has recently partnered with IBM.
• OpenWave expects to cooperate with Nokia to help push Nokia's color, data-enabled phones.
• There have been rumors of OpenWave being an acquisition target by the likes of IBM, CSCO, MSFT, or NTT DoCoMo. At these share prices, we can see why but we can't say when.
At any rate, all we can say to current OpenWave shareholders, the CEO is telling us, "Let's roll!"
Copyright (c) 2002 Jackson & Steinburger
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