My Take
by: IU_Basketball
15595 of 15597
I listened to the conference call, and came away not simply
confident in the potential of IDT, but satisfied with the nature
of the problems they face in terms of "growing pains" (and its
very nice all this is framed by profits).
Telecom wise, they are playing catch up to demand. They are
putting in place their own network, AND improved in-house
technology which will not only meet their needs but the needs
of others. They are already hard at work in creating a major
presence in Europe. They sounded well on top of the costs of
all aspects of their business and are addressing these in detail.
IDT is arising as an intercontinental contender.
Internet wise, they warned that the underwriter (Yes there is
one) and counsel have limited what they can say. The internet
business is 'dragging' down their earnings, but they feel they
are putting in place an internet enterprise which could generate
"one billion dollars" (in the words of an analyst.) How they
treat this enterprise will be with an eye towards enhancing
shareholder value, and not selling it off. Within 6 months
(being conservative) the entity will be on its own.
The operational problems of IDT in handling the fast growth of
the telecom side, and the challenging internet venture, are
being dealt with by better organization in management. People
with very successful track records will be focused on the
specific responsibilities before them, be it telecom, or internet.
The question of options is a good one. I believe that success
lies in the hands of the people of an organization. To field the
best team you are going to pay top dollar. This is true if your
Eisner at Disney, or Weill at Travellers. Fortunately IDT has a
business in place that will more than generate the returns to
justify management's options. And management will be prudent
in exercising it.
In short, management is not sitting on its hands, and
understands what actions are necessary to fuel IDTs
tremendous growth, and exploit the opportunities at hand.
If you are waiting day to day though for the spin-off, think in
terms of weeks, though already now you can see it is taking
shape. |
