Michael: I know it was not flippant. My bias is to believe that it is a rationalisation required by the master-plan. I would guess that they have said lets bite the bullet, take some short-term flak, but let's get the model right. They would need to get the model right because in the AV IPO documents submitted to the SEC for approval they will have to disclose all risk-factors and potential conflicts. The claims and counter-claims of the various components of the direct and indirect channels constitute potential conflicts of interests with Shopping.com and any other sales-related use CPQ has in mind for AV. Buyers of AV shares have a right to know that AV has a rational set of agreements.
Once again, I would think that the critical issue, today, is what effect, if any, this move will have on this quarter's and this year's revenues. Was this issue fully anticpated in Mason's opinion that CPQ is comfortable with the Street's expectations for this quarter?
My assumption is that the quarter and the year will be fine. That's why my early reaction (subject to more information) is that, if the Street reacts negatively today or in the next few days, a buying opportunity may be about to happen. The question then would be whether it will happen quickly or drag out.
I hope to develop some firmer ideas as the morning progresses. |
