Re: Briefing.com piece and conference call
Briefing.com wrote: "The expected Y2K boom never happened! At least, not in the scale expected by investors." Certainly the latter statement is true. I for one did expect by this late in the game Y2K companies would be so busy they'd be turning down work. I think it safe to say most of us still here thought so as well, as did just about every CEO of every Y2K company with whom I have spoken over the last few years.
But, is it fair to say the boom "never happened"? Is it time for us long-suffering Y2K investors to just pack it in? Certainly it's worth considering.
Personally, I'm waiting until mid to late January before I pronounce the patient dead. The tide of Y2K related mishaps has got to be rising. But at this rate it's going to take a hard rain before we see any water start seeping over the levees. 1/1/99 should be the flash point. That should be the day at least a few systems fail, forcing companies to stop sandbagging and ask for help. If by mid January you can drive your Chevy through the levee and the levee is dry, then it's time for us good old boys to start a drinkin' whiskey and rye... cause it's bye bye Y2K pie...
As for the conference call, let's be honest: it sucked.
Let me clarify: ALYD the company doesn't suck; in fact, the company sounds like it's doing the absolute best it can under the circumstances. Heck, they are still profitable, still poised to take advantage of a possible surge in Y2K business, hard at work on a post Y2K strategy, and in the process of working with a top-notch firm in order to reinvent themselves. But you'd never have known it listening to the call.
1. Bob Gruder sounds like someone who spent two weeks saying the same things over and over on the witness stand. The conference call seemed like just one more thing he had to cross off his list before he could finally go take the long weekend off. Whereas I'd give him an A- for the last call, this call was a D.
2. There is absolutely no excuse for having a conference call to talk about your financials and then not being prepared to talk numbers, let alone not even have the balance sheet in front of you. And it's not like they were that bad. Unlike many other Y2K companies, ALYD is still profitable and still signing deals.
3. I felt Bob gave a Clintonesque answer about his token stock purchases; i.e. he was indignant rather than apologetic. If it were me, I'd have said "Hey, like many, I was shocked to see the price tank from $16 to under $10 in such a short time. I truly wanted to help. I truly thought my buying might make a difference-- emotionally and physically. I did buy that day and wish I had the money to buy more, etc." That's too bad because I'm pretty sure Bob really did think even token buying on his part might help stabilize the stock price. I thought so at the time as well.
4. NJ Investors did an excellent job of compiling questions that were on the minds of the investors on SI and Yahoo. It would have been a great gesture to have at least answered one of those questions or even to merely have acknowledged the list and promise to write a reply by next week.
5. I would like to have heard far more about ALYD's SmartCode and/or other homegrown tools they will/have been writing/customizing for ERP work. I was really hoping the "new" ALYD would hang its hat on it's "revolutionary" technology; that any acquisitions would be to enhance their core competency, not replace it. That would also serve to lessen their burden on making near-term acquisitions.
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The good news is that none of the above problems is terminal. Despite the fact it looks like $1 a share for '98 is now a longshot, perhaps there is some sentiment out there that the new sales team can at least kick some butt in Q4. At least the 9 contracts for October compared to 13 for all of Q3 is a great start.
Let's also cross our fingers that the reason the price didn't tank is because ALYD has already shaken out the weak hands. Sure, it could be because the market and Y2K stocks were up in general today, but normally the most damage comes from the earthquake and not the aftershocks.
Lastly, anyone who has been reading what many of us long-time longs here have been saying can't expect us to change our opinion overnight. For the most part, we still believe Y2K will be a big problem and that companies like ALYD stand to benefit the most from it. With the share price where it is today, I think it safe to say few if any of us are in the black right now. I know I'm far far away from that right now. But, hey, Y2K ain't going away and companies can't keep ignoring it forever. That's my story and I'm sticking to it. (gg)
- Jeff
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