WE CAME, WE SAW, WE LAUGHED HYSTERICALLY!
Since none of the bulls have the guts to post a review of last week's annual meeting, I suppose I must.
From COPY's perspective, the big event was their having "retrofited" the Magicom so it would work with just one phone line. Apparently, yaks and camels do not come equipped with dual line capability, so our fearless leaders had to alter the machine. I was told by a person at the meeting who worked in telecom that Rockwell has had a modem for a long time with the capability.
When the Q&A started, Denis (I love the man like a father) said he could only take a few questions. However, it turned out that the Q&A session lasted well over an hour. IMHO, the reason was that Denis was attacked rather savagely by questions he was not up to answering, since it would have required telling the truth. Therefore, he felt compeled to continue answering questions until (in his mind) he had won over the crowd.
What were some of these questions?
Well, in spite of the fact that Denis had said that he could do no forecasting, he said that COPY was shipping at this very moment and that revenue would be booked as Magicoms were shipped.
This led a questioner to try to see if Denis could put one and one together and get two. So, the quesioner asked whether the COPY stockholders could expect the company to book its first dollar of revenue ever by the end of the year. Denis responded that that would be "forecasting," to which the questioner asked whether a dollar worth of revenue by the end of the millenia would be a question he could more comfortably "forecast." Denis did not want to answer, the audience at this point was starting to get a bit upset with him. So, he reiterated that he had mentioned that product was shipping and that revenue would be booked when product shipped so that revenue would be announced by the end of the year.
Ten minutes later, someone asked a similar question about revenue recognition. This time, however, Denis responded that this issue has been discussed at length with Arthur Anderson, and that a respresentative was in attendance, so he turned the question over to him. The AA guy said that COPY's CFO should be answering, but this was something the CFO did not wish to touch so it was back in the AA guys court. He proceeded to say that revenue could not be booked until product had experienced "sell through" to the end user, so shipping to distributors did not count. People did not understand why this was so since Denis had implied that the full faith and credit of the Uzbekistani government stood behind every distributor, so it was as good as gold. (I apologize to any Uzbeks out there--I really don't think that the Uzbek government would be so stupid to guarantee such a thing.) Could it be that these guaranteed purchasing agreements ain't worth diddly. Denis subsequently seemed to go into the mode of "don't blame me, blame the accountants." So, we still don't know when we can expect revenue.
Anyway, over time, Denis seemed to smooth over the ruffled edges of some of the more gullible "wanna believes" in the crowd. There overall attitude seemed to be "we've waited this long, how can we bail now." In other words, a pretty stupid bunch, but then again, how else can you explain their holding this turkey?
As Denis became more comfortable (feeling that he was starting to win over the crowd), I took some major liberties with reality. He said that they had a big order from Russian including connecting up the Moscow to Vladivostok corridor, Belorus, and Kiew, Ukraine. Apparently someone forgot to tell Denis about the disintegration of the Russian/Soviet empire. As Denis got more and mroe emboldened he announced that they were negotiating an order for the Russian parliament and even Mr. Yeltsin himself! Many of the wanna believers even seemed to buy into this. Has anyone bothered to wonder why the Russians would need the Magicom. I thought its beauty lay in the legibility of the screen for reading handwriting in those languages that can be typed with a standardized keyboard. Last time I checked Russia had a very manageable alphabet...whatever. I guess the Magicom, wonder that it is, has even caught with those who have no need for it.
Anyway, he is my overall assessment. A person could get rich from shorting this stock. However, I wish to add a note of caution. The shareholders of this company are by and large clueless. By dumping the stock now, they would have to deal with the fact that they were stupid enough to buy it to begun with. People don't like to do this if they can postpone the day of reckoning. Denis feeds off this with his hollow promises, in which nothing is ever stated concretely. I asked many of them how long they were willing to give the company to book a dollar of revenue and they could not even come to a definitive time period. So, don't expect these people to sell in a hurry. Secondly, I must warn all that the company still has three arrows in its quiver: 1) Announcement of that first dollar of revenue. Certainly, Mr. Yeltsin would be willing to pay a rouble for, so it will come sooner or later. 2) The big China distribution announcement. Certainly the company is saving this one, and, in fact, Denis alluded to China as the big, untapped market. 3) The stock split, which seems to always get some idiots excited. Why else do you think they authorized that increase in shares? (I didn't ask about this at the meeting--I figured my quota of questions had run out.)
Anyway, all do show up next year. Denis really knows how to throw a good party (both a continental breakfast and buffet lunch were served). See you next year. |
