Marc, others: Neil Selvin has responded to Ogrady's Power Page on Questions on the sale. His response I copy below, but you can see the original on the 4/11/98 page at ogrady.com. While he gives a lot of the same spiel, he does point out that the new venture is very "risky." And no mention on the fire-sale/garage sale approach to the GVIL products, name brand, people, customer base etc. GVIL (and the new stock ticker symbol company) are now even more of a speculative venture than ever before. This one is no longer a fundamental analysis play; strictly TA, emotion, and market sentiment. In other words: industry strength seat belts.
Rich
------------------------------------------------------------------------
From Ogrady's:
GV Response Letter
posted 4/11/98
-----------------------------------------------------------------------
I'll give you what clarity I can. Please bear in mind I can only discuss
what has publicly been disclosed, but I think I can give you reasonable
answers to your questions.
As we are selling only the modem business to Boca Research, we do retain
ownership of the current OneWorld servers for Macintosh. We also retain the
right to use, maintain, and modify GlobalFax and FaxWorks on our server
products.
I can't comment on how the $10M number was reached. Since Boca elected to
purchase our modem business for $10M, I cannot speculate on what methods
they used to arrive at the figure. All I can tell you is that the board of
directors of Global Village felt that this was a fair and appropriate offer
for our modem product line.
You can find a more up to date balance sheet from Global Village. Our
latest 10-Q was filed in February and contains balance sheet, income
statement and discussion of our December results. I think you can find
information about our assets and liabilities from this document.
As for the impetus for the change: as I mentioned in our press release and
conference call, the modem industry has undergone significant changes in
the last year. The continued decline of the Mac volumes, coupled with the
increasing focus on cost competitiveness, requires modem companies to use
size, purchasing power, and manufacturing efficiency to compete.
Historically, Global Village has successfully competed using highly
innovative software, and reliable integration of hardware and software. By
combining with a high volume, efficient manufacturer, Boca Research, the
Global Village product line will continue to compete on the basis of great
software and reliable products - only now they'll also have the strengths
of high volume purchasing power and manufacturing strength as well.
Remaining independent was (and is) not a viable means of continuing to
compete with larger companies in today's environment. The board of
directors and I strongly believe that in order to maximize shareholder
value for the modem business, it was appropriate to sell it to a partner
that can improve its chances for future viability and success. As to the
future of Global Village products, the team that Boca is assuming contains
the same engineers, the same technical support group, and the same sales
people that have made Global Village the leader in the Macintosh market.
Nothing changes - these people continue to develop, sell, and support our
products. The difference is that they have the financial and manufacturing
strength of a larger partner - something we believe will help assure solid
products in the years to come.
The shareholders of Global Village will also benefit, because our new,
upcoming products, return us to our roots of building great software and
great hardware, and integrating them together. These new products have more
value-add, and should have higher margins, than our modem products. In
order to give our shareholders a chance at significant share price
appreciation, something I am firmly committed to, the board and I feel that
building a company around more software value, and higher margin products,
in a large and untapped market, provides a much better opportunity - one
we're willing to invest in, and one we hope our shareholders will invest in
as well. Today's press release gives considerable insight into our
direction, our competitive advantages, and our future prospects. I
sincerely hope you, and your friends, will see that this opportunity, while
certainly risky, offers much better potential for building a company, and
rebuilding shareholder value, than staying the course as a stand-alone
modem company in the Mac market.
Neil Selvin
Global Village Communication |
