Cohodes gets an A!....
Thanks, Herb...
This Column's Year-End Report: Passes, Failures, Incompletes / An effort to show accountability, even if the truth hurts
Herb Greenberg
12/22/97
The San Francisco Chronicle
FINAL
Page D1
(Copyright 1997)
OK, class, it's annual report card time again. While I wrote my share of yawnersand downright snoozers, there were relatively few bona fide failures but plentyof winners. (There were also a few incompletes, but more about those in a moment.)
Let's start with the items I'd rather forget: An "F" goes to yours truly for writing a column last January that questioned whether Aussie media mogul Kerry Packer had his eyes on Data Broadcasting. You rarely win with speculative stories like that. Packer may own the stock, but he hasn't made a run at the company. Along those lines, I also should get failing marks for wondering whether Cirrus Logic and Ross Stores were about to be sold.
I should be forced to wear a dunce cap for not factoring in possible competition when writing about CardioThoracic Systems, which makes tools for minimally invasive heart surgery. (It's stock got as high as $27; it's now $5.) I should go sit in the corner for wondering whether the fortunes of San Francisco-based HS Resources, an oil and gas explorer, were about to gush. Considering the company's inactive stock, investors must feel as though they've hit a dry hole.
I should suspend myself for writing that 3Com's investors probably weren't getting duped when the networking company bought U.S. Robotics. (It now appears the short-sellers may have been right all along by alleging that U.S. Robotics had generated its impressive earnings by stuffing the distribution channel with more modems than it could possibly sell.)
And somebody please rap my wrists for writing that the goofball "rule of the rule" was flashing one of its rare "sell" signals back in July -- just before one of the Dow's most powerful advances. According to the rule, the Dow is headed for a fall if the list of "new lows" published in The Chronicle exceeds 12 inches in length. (The only consolation is that the Dow recently tumbled below where it was when the original item ran. But try telling that to anybody who gave up a few hundred points on the upside.)
On a brighter note, it's my pleasure to hand out an "A" to short-seller Marc Cohodes of Rocker Partners for his willingness to go on the record questioning the fundamentals of chipmaker C - Cube Microsystems when its stock was around $38; it has since reported unexpectedly bad earnings, and its stock trades at around $18. ( C - Cube CEO Alex Balkanski gets an "F" for failing to respond to my many requests for an interview.)
INSIDER Also getting an "A": Seattle money manager Bill Fleckenstein for going against the crowd to suggest at $68 Micron Technology was way too high; it's now around $23. He also gets high marks for stubbornly sticking with his story that Applied Materials and other semiconductor equipment makers were heading for a slowdown that has materialized.
And an "A" goes to Alex. Brown analyst Larry Marcus, for bucking the trend and making a case for Scott Cook's Intuit when it was $22; it's now around $37.
This column, meanwhile, should graduate with honors for being first to point out a warning in 3Com's regulatory filings that suggested its earnings could tumble. And it should get more than a passing grade for continuously questioning whether the fast-rising stock of Vivus, the Menlo Park maker of a male impotence treatment, was about to go limp. (It tumbled recently amid controversy.)
Honors also are deserved for being first to ask whether BankAmerica was about to buy Robertson Stephens (it did), and whether Montgomery Asset Management was being sold to Germany's Commerzbank (it was).
Also kudos for an item back in June that questioned whether rising receivables spelled trouble for Cabletron. The stock was $32. Cabletron has since announced a big earnings disappointment. Its stock is $14.
Back in April another column mentioned whether the feathers were getting ready to fly at Boston Chicken; the stock was around $30; it's now $7, and investors feel as though they've been plucked.
Another item, in March, asked whether life in the fast lane was starting to slow for Larry Ellison's Oracle. At the time the stock was $26. It went to $40, but recently fell back to its current price of $21 when the company disclosed its growth wasn't quite meeting Wall Street's expectations.
Other columns questioned the inner workings of Galoob, whose stock soared as high as $26 on hype that it would get a license to produce toys for the next generation of Star Wars movies. It got the contract, but then announced that most of its other business was lousy. Its stock now trades at around $10. High marks are also deserved for questioning whether the sale of CNS Breathe Right strips (like those worn by Jerry Rice) were slowing; they have, and its stock tumbled to $6 from $20.
And let's not forget the columns that questioned whether something wasn't quite right with the way America Online and Tel-Save Holdings accounted for Tel-Save's $110 million payment to America Online. Both companies were subsequently forced to restate their earnings.
Incompletes go to this column for suggesting that Iomega has been hiding problems with its Jaz drive (so far there hasn't been any evidence in the company's financial statements); to Fleckenstein, for his still unproven premise that PC makers are headed for a big fall; and to Cohodes, for his argument that HMT Technology, a Fremont maker of hard disks, is doomed.
Whew!
And to all a good night.
This column returns in two weeks. Until then, have a great holiday, and as they say in the biz world: Thanks for your patronage. |
