Frank, I was angry because I thought Kraber had met with only one analyst, who then issued a report that went first to his firm's sales force, which would have given an advantage to one class of stockholders. After reviewing the sketchy news reports that were issued after the stock tanked, it appears that I may have been wrong. Although I am still not clear exactly how the news was disseminated, it seems that Kraber met with more than one analyst (Lehman, CSFB) and they issued reports publicly, not privately. Certainly someone got the news earlier than we did, and was able to sell thousands of shares between $35-45. For all we know, these sellers were buyers again when the stock hit $30.
In any event, with all due respect, I think you're looking at this through rose-colored glasses. What Kraber did was issue an earnings warning. He met with some analysts and told them that WIND may miss its quarter by as much as two cents. He told them -- as he told us later in Friday evening's press release -- if business was strong this week (i.e., the last week of the quarter), then WIND could possibly make its quarter, or even beat it by one cent. Frank, face the music -- that's terrible news. I didn't make the rules, and I don't even like the rules, but when tech companies miss earnings estimates -- especially companies like WIND that trade a high valuation relative to their present revenue and earnings -- the stock takes a hit.
Furthermore, let's imagine for a second that business is good in Alameda this week, and WIND is able to report earnings of .30, which is one cent better than the First Call estimates. Unfortunately, such an event will be unlikely to move the stock much, because everyone will know that the quarter was back-end loaded.
What is most upsetting is that we have been told repeatedly by Mr. Allen Benn that this would never happen because WIND has revenue stashed away somewhere in the balance sheet to help it get through rough patches like this. Of course, I am responsible for my own actions, and I could have chosen to ignore Mr. Benn's constant table-pounding for the stock. Nevertheless, that won't prevent me from asking him now to explain his earlier messages in light of Friday's news. |
