Hi Dave,Don,etc,You know I'v been around the bush with VOCALTEC about PR and News.We have sent E-mails and such,I will encolse this one if it fits and we can stew on it.They Like to keep tight lipped even at the expense of the stock.Its a bum rap but remember its good business.
From The PR DEPT:::::::::::::::::::::::::::::::::::::::::::::::::::::
Taking your last comment first, with all due respect, management's job is
not to impress anyone, it is to create a more valuable business and to
communicate in such a way that the economic value created is reflected in
the market valuation. Toward that end, I see that you are critical of our
communications and I hope I can help you develop a greater sense of comfort
with the following comments:
As you know, this is an extremely dynamic, fast-moving and volatile area --
which makes it also vulnerable to misconception, misunderstanding,
misinterpretation, and premature conclusions and it is impossible to know
with complete certainty "what is going on" in this market at all times.
Bear in mind, the players in this space are a mix of very large and very
small companies. In a lot of cases, it is the very large companies who are
in the position of deciding whether or not to do business with the very
small companies, and they consider their plans (and in some cases even the
very fact that they are involved in IP communications at all) top secret.
Let me pose this rhetorical question, would it be in the best interests of
shareholders for VocalTec to disclose "positive" information to offset an
insignificant competitor's aggressive PR tactics if it would in turn
jeopardize millions of dollars of potential business down the road? I
applaud you for doing your due diligence, and we will do our very best to
be responsive to your requests for information, but please evaluate all the
information you see from the variety of sources you have at your disposal
in light of the basic fact that many of the key participants in this market
currently have neither the need, the desire, nor the legal obligation to
disclose "what's going on" and it is not up to VocalTec to do it for them.
This creates a practical limitation on our ability to give you a "complete"
picture at any given moment.
With the above in mind, VocalTec has said that the service provider sector
of the market is moving faster than the enterprise side and management is
confident about its competitive situation with both "Next Generation" and
traditional telcos. During the review of first quarter results, management
noted that VocalTec is in the game in almost every selection process
currently underway; the feedback is good and VocalTec is making the "short
lists" alongside the big guys from both the telecom equipment and
networking sides.
I hope you will be reassured to know that the sell side analysts who cover
VocalTec did not characterize our earnings report as "bad" when they
understood that the decline in gross margins related to the need to supply
"turnkey" systems to telcos for testing, pilots and field trials that
injected a lower-margin hardware component into the revenue mix.
The only further comment I have on the LAN Times matter is to note that it
became apparent (after the fact) that e-Net had obvious motives for their
aggressive PR tactics:
Thursday April 16, 11:16 am Eastern Time
Company Press Release
SOURCE: e-Net, Inc.
e-Net Completes $5 Million-Plus Private Placement; Company Says the
Financing Improves Its Position to Execute Its Business Plan
GERMANTOWN, Md., April 16 /PRNewswire/ -- e-Net, Inc. (Nasdaq: ETEL - news)
announced today that it has closed on a private placement of restricted
common stock resulting in gross proceeds of $5,625,000 and net proceeds of
approximately $5,100,000. The placement agent for the transaction is the
Pennsylvania Merchant Group. The placement totaled 750,000 common stock
shares sold at $7.50 per share, based on a rolling 5-day average share
price prior to the pricing of the offering, which was set on Friday, April
3, 1998. The shares were offered and sold only to institutional investors
and other ''accredited investors'' as defined in Rule 501(a) of Regulation
D promulgated under the Securities Act.
I would respectfully suggest that we should all look at this particular
event as yet another validation that VocalTec, as the clear market leader,
is the "company to shoot at" and be realistic about the high probability
that we will be under constant attack as long as we arein the lead. When
the attacks stop, is when I will begin to worry in earnest.
VocalTec's NextGen program has grown to 16 providers. As to your
conclusion that one of them - RSL/Delta Three -- is "bailing", I believe
you misinterpreted the release. Delta Three has been involved with several
vendors for some time and, while it appears that they are beginning to
narrow the field, they are still part of the NextGen partners program and a
valued customer of VocalTec. As the daughter of a purchasing manager for
several major companies, I know from my dad that dual or multiple
supplier/vendor relationships are customary and sensible and to be
expected; it does not reflect poorly on any vendor that they do not have
100% of the business. That you are beginning to see this type of thing is
a positive sign that the market is indeed maturing. That Delta Three is
doing business with Ericsson is logical in that RSL has close ties to them
with respect to the switches they use is their traditional business. All
the surveys indicate that this is going to be a very big market and there
will be plenty of room for multiple vendors.
Finally, the absence of insider buying and, indeed, periodic insider
selling in this type of company is not unusual. As you know, stock-related
compensation is an important part of attracting and retaining the right
people and there is no way to "spend" that form of one's compensation
without making periodic sales which, appropriately, must be disclosed.
Also, open market sales are the customary "exit strategy" for venture funds
and the only way they can realize the return on their earlier investment.
I know that you have been interested in VocalTec for quite some time and
that you are an influential point of contact for other interested
investors. I have tried to give thoughtful and useful responses to the
issues you raise. Please don't hesitate to phone me at 212-830-9080 if you
wish to discuss any of this further.
Best regards,
Claudia Gatlin |
