SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Technology Stocks : Phoenix Technologies (PTEC)
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Jules B. Garfunkel who wrote (2839)10/24/1998 8:21:00 AM
From: Fred Fahmy  Read Replies (3) of 3624
 
Jules,

Just listened to the CC. Your very appropriate question gets to the heart of one of my key concerns....pricing. Thanks for asking the question. Jack mentioned that your follow up question got into "account management" and he didn't want to publicly address the question which was essentially "have customers said if you don't give us our price we will go elsewhere". This is exactly what I have been asking myself. So, did he shed more light on this when you spoke to him personally. Does PTEC really have virtually 0 leverage in pricing? I find this extremely strange. Sure they're "not a monopoly", but they do have a very high market share and they aren't selling toilet paper. It seems that in your private conversation he implied to you that ASP's might firm as a result of mix...but this still doesn't address the question of pricing leverage for an individual product/customer. So here again, I am left with a concern regarding business/product management (as opposed to products and marketing position which I continue to think are excellent).

I was very happy to hear Jack say that he was tired of under achieving expectations and I think he might be getting the picture that it is prudent to be conservative, especially with global uncertainties continuing.

These are what continue to be my primary concerns:

1) PTEC is not getting a fair value for their product. Jack said that OEMS margins are getting squeezed and that this puts pressure on them. Perhaps this is true at CPQ and IBM (I don't know because I don't follow their financials in that great of detail), but the big direct vendors such DELL and GTW are actually reporting increasing margins during these difficult competitive times. I think part of their gains are coming at our expense.

2) This company has virtually 0 visibility in the investment community. They need to be proactive in stirring up interest including the analysts. The length of the CC Q&A session and the number of questions was very telling.

3) Management still has a credibility problem but I think I heard signs that they realize this, and therefore the are probably now leaning towards conservative guidance.

4) No buyback intentions made public. Leaving any prospective (and current for that matter) investor scratching his head wondering are they waiting for a significantly lower price???...and, therefore, should I wait too?

Now the positives as I see them:

1) Excellent products in critical fields which will only become more relevant with time.

2) Strong balance sheet and financials.

3) Strategic acquisitions which seem like a perfect fit and appear to be integrating nicely already. One stop shopping is a key plus and I liked the example Jack used of the set top box customer.

4) High market share which should eventually lead to some degree of price firming.

Oh well, let's hope that the DOJ's concerns end up being legitimate <ggg>. It seems to me that they understand the implications of the PTEC/AWRD merger better than the investment community.

Good luck to all,

FF
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News