I just got off the phone with CSGI's President, Ron Bishop. He said there is no shareholders meeting this week, or anytime soon. There's not even a board meeting as someone has e-mailed me.
Ron said he's seen a copy of the stuff that's been posted here and is quite dismayed at what he reads. He said that when he first came to Consygen he couldn't meet the second payroll and now he says they have contracts, money in the bank, and a new building that's all paid for. Obviously he thinks any talk about bankruptcy is crazy.
I asked about Telenor and Motorola and other than saying they were paying contracts declined to get into specifics. As regards an alliance with IBM in Singapore, he doesn't know how that rumor started. To be safe, I rephrased the question as "Is there anything at all going on with IBM in Singapore", and he joked "I know there's an IBM in Singapore, but there's no relationship between us."
What I hear from Consygen is what I hear from just about every Y2K vendor: we expected to be seeing much more of an urgency by now and doing much more code. Ron says the code they've looked at from body shops has a 10-15% error rate, which, and I agree, is atrocious. I told Ron about a billion dollar insurance company where I have contacts that sent their code to India and it wouldn't even compile when they got it back (no, that Y2K vendor is not public (g)). So, IMO, CSGI and other automated vendors will eventually have their day in the sun as CIOs finally admit publicly what their programmers have been saying privately for some time: ain't no way we're gonna be Y2K compliant at this rate. Of course, just how many contracts CSGI can ink and whether they can turn code around as fast as they hope is a question no one can answer at this time.
I am getting the sense that, for better or worse, CSGI the company and CSGI the stock are two different animals. It's public knowledge the founder and majority shareholder, Robert Stewart, has been selling shares. True it's a small amount compared to his overall holdings, but, IMO, selling so close to a private placement is very bad timing. However, I suppose one could argue that there's never a good time for the owner of a company to sell (gg). Also, while the company may be in good financial health, the private placements that were recently done mean dilution and a lot of overhang that won't go away unless the stock can move on actual earnings. This will obviously take time. Again, just how much patience CSGI investors have remains to be seen.
So, I hope I've done justice to my conversation with Ron. Having also met him once in person I can say he's very down to earth and easy to talk to. Just how well a job he's done as President, however, is not something I am qualified to talk about. Nor am I qualified to make any judgment about whether the stock will go up, down, or sideways. In other words, the best I can do is present "facts" as I know them and stimulate further discussion here on SI.
- Jeff
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