Apology accepted.
Just playing with you a little bit. I know you are sensitive to the 'Not really any new news' statement. I also apologize for my comments. We definitely disagree on the stock, but I do respect your knowledge of the company. If I didn't, I would not post to you at all. And, I do know a little bit more than I am willing to post, but not much, and certainly no inside information. I refrain from posting everything to remain anonymous as I have had a lot of personal contact with the company and don't want to lose future access.
Ok, a real response to your post:
Do I know about the NATWEST report?
- No, your post was my first exposure to it.
Does it bother me?
- No, most analyst reports are driven by the projections made by the company. It is very rare that they do any independent checks. Also, the least reliable reports (at least on the short side) are from analysts from the firm who syndicates a debt or equity deal (ie. Natwest or Prudential). This is because a very large part of analyst compensation is from investment banking deals. Analysts who write negative reports face not getting additional investment banking engagements, angering their clients who participated in the offering, or losing access to the company. That is why you so rarely see "sell" recommendations. But then again, I bet you already know this.
Do I know that Yahoo is not meeting with the company?
- No. I would not be surprised if Yahoo was meeting with them. I would also not be surprised if they did some kind of content link, especially with the Interactive Channel. My comment that I did not see a strategic fit was in regards to a buyout. Yahoo is content, whereas SRCM is software (other than the IC). Even if SRCM had incredibly valuable technology, Yahoo would not be the best buyer. It would be a different business than they are currently in.
Do I think Yahoo is interested in reaching viewers through the TV?
- Absolutely. I would expect them to sign deals with the operators to have Yahoo as the default homepage whenever possible. By the same token they might like to do something with SRCM's IC if it is picked up by cable operators.
By the way, one of the problems I see with SRCM's IC, is that Yahoo is providing local content over the internet. While I hope they keep the IC cash drain going, the company would be better off scraping that division and just using Yahoo.
Am I scared that I could wake up to a big licensing deal?
- Absolutely. I am always scared that a short will be bought out or sign some major deal (Tellabs turned my CIEN short from a winner to a loser in two days). You never know what might happen. Also, with SRCM, the more realistic fear is a stock surge based on hype and then a short squeeze. I have already been bought in on BAANF this year.
Do I think they will sign a big licensing deal?
- No. A prior investor told me that a year ago this company told him that AOL was really interested in them and could buy all or part of them. I don't believe anything this management team says given their past history of hype. When they start making money from the virtual modem and the IT network is really producing $11 mil of cash flow, then I will admit my mistake, cover, and move on.
Ok, I think I covered all your points. If there is anything else, let me know. I will address it directly as long as the request is not insulting.
Regards,
Archer |
