Re: Nanda's Questions on ALYD
[Sorry I couldn't respond earlier, but I have a big conference coming up in two weeks and time was and will continue to be in short supply until then... so, after this, my posting will be short and sporadic for a while.]
ALYD the Company
I own ALYD stock because, based on approach, staff and documented contracts, I feel that, for the long haul, ALYD is best positioned to rake in the most Y2K bucks. In late June I posted "10 Reasons why ALYD is a Moonshot in the Making" and I still stand by what I said: techstocks.com.
The Role of SI
As flattering as it might be to think we here on this thread have been responsible for the popularity of ALYD and hence the dramatic rise in its stock, as was alleged by the WSJ, all one has to do is study the chart: ALYD's share price did zippo until they announced contracts with Aer Lingus, McDonnell Douglas, 3M and Nabisco.
CEO Gruder's Credibility
The WSJ made a big deal about CEO Gruder's NASDAQ and employee size predictions made a year ago that have not come to pass. I'm told by people outside the company that his "forward-looking" comments were made at a time when analysts were predicting an explosion in Y2K business and ALYD was supposed to land their first big contract-- so he was feeling especially optimistic.
Regardless of timing, I suppose we are all accountable for what we say, especially if we run a publicly traded company. Nevertheless, knowing that Bob is a supremely confident guy, I suspect if given the chance to do it over, he'd probably say the same things again.
NASDAQ Listing
ALYD finally handed over their paperwork to the SEC about four months ago. Early last month they received and answered the SEC's questions regarding the documents, which means they are finally under review. As far as I know, the SEC has not even responded to ALYD one way or another as to whether they have finally met the qualifications to be an "SEC-approved reporting company". All indications are that such a notice could come any day now.
The big question is whether NASDAQ has reviewed ALYD's paperwork for inclusion on the National Market System concurrent with the SEC. If so, then all that might remain for ALYD to be listed is the SEC's blessing. However, if this is not the case, then only NASDAQ knows how long the wait will be. One thing is sure, if there's anyone that's frustrated about this whole saga, it's ALYD.
Employees
In January, ALYD switched their Y2K remediation strategy from "expansion" to "windowing". Therefore, contracts being equal, they have drastically reduced their need for hiring programmers. However, with each contract they continue to increase their work force and are in the midst of filling up the new building they have leased.
Contracts
ALYD's focus is the Fortune 500 and the equivalent companies overseas. The quality of their current contracts is proof positive of their ability to land the big ones.
I can also say that the "buzz" is very strong about future deals. While many of the companies on my list are of the proverbial "a friend of a friend told me" variety -- and ALYD will not confirm or deny rumors of contracts -- the mere fact that there is such a buzz is a good thing. Better yet, when people I know call Y2K project managers and nose around, the vast majority of them are now familiar with ALYD.
Financials
How and when ALYD releases its 2Q financials should be dictated by how the SEC responds to ALYD's request to be an SEC reporting company. As to what those financials will reveal is anyone's guess.
While on the one hand revenues will obviously be substantially higher than last year at this time, net profit will probably be severely affected by ALYD's buyout of Chase, its European partner, to assume total control of their European division. Unlike companies like IMR and TPRO, ALYD has little if any non-Y2K related revenue. In the long run that will prove to be an asset since they are well-prepared to ramp up as the demand warrants, but in the short-run, the bottom line will suffer a bit.
Conclusion
I, personally, have chosen ALYD as my choice to be the big winner in the Y2K sweepstakes. Will it be smooth sailing from here to Mars? Of course not. Even after we've tripled our money, won't we still be asking "What have you done for me lately?" I suspect so.
Should we all be worried about ALYD having an astronomical PE? In theory, yes, but as long as there are people willing to keep buying their stock, who cares. Do I think people will continue to buy ALYD and Y2K stocks in general? Personally, yes, I do.
And lastly, should people take a second mortgage on their house, raid the kids' college fund and put their life savings in ALYD? Sure, why not. And while you're at it, why not knock over a liquor store, pawn your grandparents' jewelry and moonlight as a drug courier for a week. [I figure if any reporter has read down this far I might as well say something inflammatory for which I can be quoted out of context to make their story a better read.]
Seriously, it's your money... why should I care what you do with it? Capiche?
- Jeff |
