Details of Phil Barton conversation.
I spoke to Phil Barton of Seeq IR on Tuesday (23rd). It's the
first time I've spoken with him, and I found him polite, open
and professional. He obviously takes his role seriously as he
called me back on what must have been the day when the phone
was melting !
Obviously there are things that he can and cannot say in his
position, and the following is not a verbatim transcript of
the discussion - simply my interpretation of what I *think* he
was saying. Note I am not trying to lead anyone with the
following - I urge you all to draw your own conclusions or do
what I've done and talk to him yourselves. I also apologise in
advance to Phil, or any of the readers, in case I have
misrepresented anything.
Mark
Q - There seems to have been a lot of volatility in the price
recently. Can you think of any reasons ?
Yes, the stock has had more attention of late, and a number of
factors seem to have contributed.
Firstly the company changed it's rules regarding how much stock
could be owned by a single party before it was considered
predatory (going up from 15% to 20%). This was fundamentally
to allow SB to take a larger position in the company if they
wanted. SB have done a lot with/for Seeq, and whilst they
may or may not want to increase their position, the older rule
would have been restrictive. This change seems to have fueled
unjustified takeover speculation.
Secondly, Phil Salsbury has held a number of meetings recently
with journalists and analysts which has increased the profile of
the company. There was a Wall Street Journal article around
Sept 8th (?).
Thirdly, there were other press releases about senior
appointments over the last few months which also increased the
profile.
Finally, SEEQ is a relatively small stock, and is traded by a
lot of small investors. There has been a very high profile and
a lot of recent activity amongst this group, particularly
internet discussion.
(Strange how that happened about the time that discussion at
this site exploded ???????? Maybe the Hype Patrol would like
to place themselves under house arrest, or maybe the NASDAQ
police will do it for them.......)
Q. So might the 20% rule be to allow SB to inject new cash ?
No, the company is in reasonably good cash shape.
(Speculation - If you are SB, and you've got an opportunity
to capitalise on your investment in a small co. that's about
to do well, would you not wish to increase your stake to
maximise the return ?)
Q. There seems to have been a recent downgrade on the stock ?
Yes, there is just one analyst covering Seeq - Brean Murray -
which means that there is no averaging of analyst opinion.
BM had an estimate of 7c for the current quarter, which Seeq
though was probably optimistic. BM have now downgraded this
to 1c, which *may* be pessimistic......
Q. So the results will be somewhere between these numbers ?
....... I couldn't possibly comment, but the general health of
the company is improving all the time.
BM also downgraded their prediction for '98 from 30c to 15c,
and we're a bit suprised by that. Whilst 30c is an aggressive
target, the management of the company have done so much in the
last few years to lay solid foundations for growth that
internally the company should be aiming at these sorts of levels.
We are presently trying to interest other analysts in covering
the stock, which should give coverage more stability. We held a
meeting with potential analysts a couple of weeks ago.
In addition it would be good to see the market treating Seeq
like other net stocks - i.e. with similar P/E ratios - (I
think he feels that something like 40+ wouldn't be bad !).
Q. Have the senior appointements started now and they delivering
as expected ?
Yes, the two seniors announced over the last few months have
been in place for a while, and represent a significant
strengthening of the Sales/Marketing activities.
Q. Your last quarter statement said that the 100Mbit business
was doing well and accounted for increasing margins. Is this
still the case ?
Yes, the 100MBit is doing well, though interestingly, ALL the
revenue comes from MACs and NOT physical layer parts. We were
late in getting these devices to market having concentrated
on the T4 parts. However, we now have the right parts and are
extremely encouraged by the independant test reports on these
new items.
(FYI - there was a press release about a University test of
the new devices which was VERY positive - can't remember who,
but Phil indicated that they were well respected in the field).
We therefore have some catching up to do in this respect, but
are actively encouraging the market to design-in these new
items.
Q. As useful feedback, I see you now have the new Web Site
operational and would like to say that it's a major improvement
(which it is !). It is much slicker, easier/faster to
navigate, and seems to link better into the various search
engines.......
Thanks for the feedback
.....But you still seem to be light on press releases - I
counted only 7 for the last 12 months - is this something that
you could strengthen ?
Yes, probably, this is being investigated.
Thankyou Mr. Barton.
-----------------------------------------
So there you are. More data. I know what I think, but you
must draw your own conclusions....... |
