I believe I've read interviews from at least 2 cable company CEOs, one Comcast, and another I believe DISH, after the litigation settlements and the agreement announcements that do indeed put this article into much greater perspective.
What these interviews concentrated on in the GMST context is how basically, once an enemy, is now a strong business partner (and not just in political and celebrity politeness) but in actual facts. As they went on to cite specific elements including data, brand, technology, expertise, that GMST brought to the mix and how they were now going to take full opportunity (or to that affect in strong an unambiguous terms) to benefit from this relationship.
Comcast, for example, using GMST and not TiVo as their PVR technology partner. I have Comcast cable, and my wife was going to buy me a TiVo for Christmas this year, but stopped because I told her that Comcast was going to offer a PVR in the following year. I look forward to seeing how GMST executes on this opportunity as I'll be one of the first sampling the new product.
Comcast also spoke about utilizing the two way interactive mechanism that exists in their service. At present it is VOD (which is out half the time in my neighborhood, the VOD is not presently reliable, at least in my neck of the woods), but this interactivity could certainly be used in a myriad of ways beyond VOD, into T-Commerce and into, as TiVo is doing, Showcases for on-demand advertising (Comcast has far more viewers, and if Showcase is working great on TiVo it should be used to even better effect on Comcast), and this is before any of the branding advertising, or even point of purchase. I still think a Dominos or Pizza Hut ad run late at night would drive more spontaneous business, more cost-effectively and with certainty than any other advertising medium out there. Staring you, in the face, in your home, 8x an hour when you get the late night munchies.
The CEO of DISH had similarly powerful comments about their sudden friendly partnership with GMST and how they intended to take full advantage of it. I don't think DISH has nearly the same 2-way interactive capabilities of say Comcast, but I found the tone and the unusual enthusiasm by GMST's partners (unusual in that it was not mere politeness and press releases but these were true working, valuable, irreplaceable partnerships) to be very confidence building for what GMST and partners will build over the coming decade.
The execution and length of time it will take to bring the product appears to be the random element. We thought it was here in 2000, now we know it is not here in 2004. Comcast promises the very inkling of it being here, the start, the hitting the chasm maybe in 2005, and i-Guide may be to Windows as IPG was to DOS (well, MSFT made a lot more money on their products, but the not so accurate analogy might still be accurate as far as GMST's product adoption).
In any event, the article does put in much better context the importance and long-term value and vision of these latest agreements. The agreements themselves build a platform, buy the real estate as a better analogy, but it is what the development on top of the real estate that will prove the true worth and it will take years of development.
All in all very exciting times, at the wave of a new paradigm yet again, the interactive, converged, home entertainment, digital center. And GMST appears to be the one unifying hub.
We will see how it plays out, but I am satisfied enough that I bought a lot more shares and like with QCOM, gonna try to think really long-term. With market beating returns year after year. GMST presently selling for approximately 3x revs or so, ARMHY, another favorite of mine selling at approximately 10x revenues, given that I think GMST, if this turn around does really work, will have a faster growth rate --- we will see if logic plays any part in long-term stock appreciation. GMST should outperform ARM stockwise I am predicting from this point on.
It feels like a good long-term valuation. It does not feel like a stock that is going to triple overnight or that is so outrageously undervalued it was laughable (As ARMHY was when I bought it), however, it feels like a stock that is undervalued to the point that I expect excellent long-term returns if there is competent execution on the platform both as to increasing distribution and developing the real estate (which admittedly relies on cooperation with the cable and satellite companies).
Tinker |
