Simon
Thanks for your lengthy response to my posts. I am very sorry you were not at the AGM. It would have been a golden opportunity for us to have discussed all these points at length. I also know you don't want to debate the issues. That's OK too.
Let me respond to your points in the four areas I raised:
1. Marketing is "bad". We'll agree to disagree on this one. I must admit I haven't seen the latest Supervision graphics so I am winging it in this one but my guess is they are still very poor (Defense contractors are not know for their loveable, huggable, "pop every time" graphics). If the graphics are not viewer friendly, they are not going to fly. The golf product needs much help. We have labored over Fox now for the better part of one year and still no contract.
2. Management is "poor". You have the better on me again on this one. I had never met nor talked to Ed Plumacher until the AGM and the interface was minimal. I know nothing of Ed Plumacher's competencies other from the things I see happening and not happening. Examples: Essentially no revenues in FY 1998 after the same performance in FY 1997. (You and I both agree that this company has to rack up sales). Mike Russo is not a general manager and yet Ed has him "running" the company: error in judgement. It's not fair to Mike and it sends the wrong signal. Mike should not be on the board and should not be the company spokesperson regarding business matters.
Derek Donaldson was the chair of the meeting: He was OK (an attorney who had done this kind of thing before) but certainly not COB material: error in judgement. The company does not have operating plans: this is a must and QSTI choses to operate without one. To me this totally unacceptable. How do you hold people accountable without an operating plan? What are the plans for FY 1999? Do you know?
3. Poor slate of directors. We'll agree to disagree on this one too! Derek Donaldsen and Rene Stewart should not be board members (both very weak). We lack the knowledge we need of the entertainment/ sports industry and I do not see anybody with strong marketing skills. CTOs are not generally known for their business skills (I do not know Paul Baim, so I'll accept your observation that he's the right man.) The CFO from Timberland, I'll accept; however, with his industry background (which I assume is apparel), I have reservations about his utility to QSTI. This company is technology rich and marketing poor. With a better balance on the board, I'd feel a lot more comfortable. In my experience working with both big and small companies, technology push doesn't work any more.
I'm impressed that you have increased your position. You certainly know more about several of the critical areas than I do (Fox, the German affiliation, Ed Plumacher, etc.). I can only judge on what I see and hear. The results, you'll have to agree, are atrocious and it comes down to how confident are you that they will be able chalk the numbers up on the board.
There are obviously people out there who are buying stock at 60¢ and in considerable volume. I assume that these are shares that the company is selling in order to cover operations until sales take off.
As long as this condition holds I'll hold, but if we start to see the volume drop off and the price drop, I will sell most of my remaining shares. I'll keep some so that I can return to this year's AGM and see what's happening. If it's another year of net sales of <$200,000, it will be a very interesting meeting.
Dick |
