Carl,
Most if not all of the people on this board have owned or followed this stock for years so a form of shorthand has developed. The matter of Ampex's purchase of an option in an internet web host has been disclosed in a series of readily available SEC filings.
The short answer IMO: Ampex is trying to develop a web host specializing in areas where it can parlay its decades-old expertise in extreme data recording, extreme professional video recording and exteme datatape storage (recently complemented by Micronet's RAID technology) into a package of video-related outsourcing services for the commercial market and..........this one seems most promising, a package of entertainment services for the consumer mass market. One of many proliferating on a daily basis. Unlike most of the no-past-questionable-futures type of internet stock being bidded up the stratosphere by short-term players vs short-term players in five and ten-minute intervals, this internet puppy has a past, a storied one and a troubled one as well.
In the field of data recording, Ampex has been a major player since the end of WWW2 when among the war booty taken from the Germans were the magnetophones which jumpstarted the magnetic recording industry in this country which while developing independently and along parallel paths as the Germans was considered inferior. Ampex was among the first to port that German technology into a series of orders from the Armed Forces. Even today, Ampex data recorders continue to be used in the fastest planes, boats and submarines. The Russians have even been using the DCRsi in the MIR space station after having been stuck with their 2-inch bootlegged data recorder technology during the Cold War. These applications use AXC's data recorders in complex data acquisition systems that include the most sophisticated sensors (cameras, microphones, thermometers, fiberoptics, etc) in the world. The Department of Defense and the Department of Commerce have been arguing about the pace of migrating this type of technology (and many others) from the classified world to private industry since the end of the cold war. Chances are that Big Business will continue to win out for after all, to quote one dead white guy, the business of America is business.
In the field of broadcasting, Ampex won the race to develop the first practical video tape recorder in the mid-fifties (see AXC website) using what is now known as rotary head or helical scan recording (just like your VCR). Ampex VTRs were dominant during the early days of television (this company made Bing Crosby and his family which owned Ampex extremely rich by 60s and 70s standards) and its equipment was the standard in the professional broadcasting industry until the early 1980s when its core set of pioneering patents started to expire and became part of the public domain. By then the Japanese, which invested heavily in the development of the manufacturing base for the consumer electronics industry that it now dominates, were using the bountiful cash flow from the mass market to go after the profits of the niches and this resulted in Ampex being punted from one ownership group to another. Before the current ownership group took over the $700 million (revenues) Ampex in the mid-eighties, Ampex was part of Signal then it became part of Allied-Signal during the merger.
Before going further, let me point out one clear lesson of history that I have bootlegged from various academic studies that have focused on why certain innovative companies never make it to the bigs. In AXC's case, it never crossed over and made it to the consumer market because it made one fateful decision in the early sixties that I hope the current owner/manager has learned, at least in terms of target marketing.
At that time, Ampex was a go go stock in the a-go-go sixties and it was owned by the likes of Ned Johnson (Magellan) and Philip Fisher, the legendary father of the Forbes money manager and columnist. At that time also, Ampex was generally acknowledged to be one of the topnoth engineering outfits in the world, one with a reputation for brilliant systems design but one which never developed the capability for mass manufacturing (the foundry and outsourcing industries weren't big enough at that time). As it perfected its video recording technology, it decided to retain control of its technology by deciding to focus on what it did best and that was to design high performance systems in the professional broadcasting arena and license its technology to the eagerbeaver Japanese manufacturers of "mickey mouse" transistor appliances like Sony and Victor (JVC). Ampex also decided that it was feasible to let the Japanese take the financial hits involved in singlehandedly building a manufacturing base and consumer market for video tape recorders, and to participate eventually in the mass market by using its high-performance systems design expertise to dominate the tape media market.
Ampex was among the first American companies to feel the sting of the time-to-market speed and ferocity that the Japanese (now joined by the Koreans and Taiwanese) continue to show in going beyond the bend of the manufacturing learning curve and using price to gain market share. The present day Ampex continues to generate a decent royalty stream ($8-10 million a year, over $200 million over the last 10 years) from its video and audio recording technology but it never had much of a chance to enjoy the bountiful mass market profits of its pioneering tape recording technology because of that one fateful decision made to eschew the mass market in the early sixties. It did enjoy the financial applause of the stock market -- which dreaded the capex hits on earnings that small Ampex would have had to shoulder to develop a manufacturing base AND to develop a consumer market -- which showed up in its stock price in the early sixties, but that was a phyrric victory that has been sandblasted many times over into the financial record of this company.
Let me pause for now in tracing the pedigree of this past and present mutt to point out that, as the chart shows, this one has been an acquired taste of pain for me. LOL. That said, sometimes I ask why I post and I think I do because, aside from working out jetlag and pooling resources with my fellow investors, I'm honoring in a way all the great teachers I've had over the years, all of whom have come from the school of "teach thyself."
With that, I hope you find useful that rambling piece of history I have synthesized from many sources and eventually doing your own due dilly with this stock as I have over the years. If all Bramson wants to do is use the internet as a lever to get the stock price up, well, fine let there be no illusions then......... and there's gotta be a way to play that. But you know, I'm slowly being persuaded that this guy, maybe, just maybe, really wants to turn his substantial stake in the company into something bigger and kick it to the next generation (tip for ED B. - real estate can always survive an idiot generation or two). I'm prepared to add at higher and higher prices if that turns out to be the case.
Gotta go and do some hard asset stuff in the analog domain (real world), folks, so merry christmas and happy new year.
Best,
Gus |
