Hank,
Indeed, fair enough. Don't get me wrong, this is not one of my core holdings. I grew up in Omaha and have some friends who told me about DTLN. These are guys who I have a pretty fair amount of confidence in. The things they told me are mere speculation and furthermore have no business being repeated in an online forum. I have no concrete information that I could relay to you that I could make a rock-solid case for covering your short and going long. I just heard what these guys had to say, did a very small amount of DD, and took a stab. In my very light DD, I found nothing to substantiate Mr. Wexler's claims.
I can tell you this: the verbage about "outdated technology/pipeline" is a bunch of hooey. My folks raise cattle in rural Iowa. I have tried to get them hooked up to a conventional internet provider on several occasions, to no avail, unless they were willing, of course, to fork over the long distance charges associated with connecting to the nearest city's ISP local number. For rural folks, ISPs are no solution. While I don't know as much as I should about DTLN in particular, I do in fact know quite a bit about satellite communications and when I worked as an analyst for a regional firm, it was one of the market sectors that I followed closely. Satellite is where it's at, believe me. Bill Gates and Craig McCaw wouldn't be sinking $700 million into Teledesic if satellite transmission was an outdated pipeline.
I read Greenberg's analysis of DTLN, and he is out of his league, at least IMO. He claims that all farmers are going broke and hence cannot afford to subscribe to DTLN. He is showing how little he knows about the farm community. To be sure, there are several small family farms who are struggling to make ends meet in this current environment. However, these guys aren't DTLN's target market. These guys don't raise enough crop/livestock to warrant hedging their "inventory" through the commodities markets. Hence, the guys who are struggling have no use for DTLN, and are not DTLN's target market. Even though the ag economy is struggling, you can be sure that the "big sticks" have plenty of capital and sagging ag commodity prices only give them more reason to utilize DTLN's services. A good analogy would be the stock market. In a bull market, plenty of wannabe do-it-yourselfers would be following the markets on a daily basis, tracking their 401k holdings, etc. And they would be using the cheapest means to get their quotes. But bull or bear, the *real* traders will still subscribe to the premium services, because, as you know, downtime in your quote service when you are trading as a pro is a deathknoll. The price I pay for my quote service is meaningless--my only concern is downtime, and I'm willing to pay a premium to get flawless service. Same goes for DTLN's target market. The ranchers who feed >2000 head of cattle could give a rats ass if there is a free service--they'd rather pony up the money for a reliable service because missing out on one trade could easily pay for what it cost to have a reliable service, vis-a-vis a free one.
I guess we will have to agree to disagree. Good luck with the rest of your investments (but of course, I hope you get creamed in your DTLN short...LOL...I'm sure you feel the same way about my position).
Gary |
