Jon,
The reasons I invested in this company initially were outlined in detail for months early last year.
However, I had no idea at that time that Sim was so friggin incompetent as far as communicating with WS or managing the shareholders cash. I also had no idea, that when the going got tough, he would make ridiculous public statements such as if CREAF loses the sound card business to embedded sound then we will just sell speakers and algorithms....and ELECTRIC PIANOS!!! You think this is what WS wanted to hear as Sim's new vision. Unfriggen believable!!! I also had no idea he would totally and completely mismanage WS expectations repeatedly from his ignorant "indsutry wowing" comments at Comdex two years ago to his guidance of 20-25% revenue growth just 6 months ago, to his revision of 5-10% growth recently, to his current estimate of flat/declining revenue. I had no idea he would misrepresent the intention of the buyback strategy. I had no idea he would let DIMD steal the industry thunder with a product like RIO while he stood paralyzed.
I had no idea he would come up with the worse idea to date...namely to squander our resources on a dividend (an admission on his part that he is clueless on how to achieve capital appreciation). I thought he would invest our money wisely to grow the business with new technologies and strategic acquisitions. He did a little of this, but much too little as evidenced by continuing growth concerns. I had no idea he would mis-manage a great opportunity to buy back shares in 1998. I had no idea he would publicly state that the purpose of the buyback was to stabilize the stock and reduce volatility and then watch it go from 11 to 14 to 18 back to 16 to 14 and now 11. Is a 20% drop in one day Sim's idea of reduced volatility.
It has taken me a while to understand why WS considers Sim a joke, but it is painfully clear now, especially after some of the comments this week.
What do I expect Sim to do, you asked??? Simple...bring in some outside help. Bring in some people who understand how WS works and who can communicate with WS. Bring in a sesaoned veteran who knows how to GROW businesses. Suspend this idiotic dividend and put the money to use GROWING THE BUSINESS. Look at strategic partnerships or a possible merger with a well known consumer electronics company such as Sony or Panasonic. I'm sure either of these companies (both of which have been actively expanding into the PC business over the last several years) could put CREAF's resources to much better use. Instead...he is suggesting that CREAF come up with products to compete against these giants. Clearly, Sim has become delusional as demonstrated by some of his comments over the past few days.
Of course there IS the more cynical possibility...namely the OAKT theory. Perhaps Sim isn't as clueless as he is making himself out to be. Perhaps he is sick of dealing with investors and wishes to drive the price down so that he can make an offer for the remaining shares. This is exactly what Tsang did at OAKT. In fact, he got the price down REAL low and then made a cash offer for the remaining shares BELOW BOOK VALUE!! (the offer was rejected). Sim has the ability to reduce the float significantly via the buy back. The lower he keeps CREAF, the more the float reduction for the buck. All the while he is accumulating cash via the dividend which he could even increase to get more cash in his pocket for an eventual buy out offer. I think you get the picture.
So the way I see it, there are two extremes....on one hand Sim could be as completely incompetent as it appears in providing shareholers with a decent return....on the other cynical hand, this may be part of a greater scheme to get 100% ownership of the company. Either way, it's pretty pathetic.
I wish those who are defending Sim could provide one, just one, example of any public company on any US exchange that has the balance sheet and earnings of CREAF over the past two years AND has under performed CREAF. I have asked this question many times and have never been given an example. Relative to its fundamentals, CREAF has been the worst performing stock, period, during the greatest tech bull market in history!!!
FF |
