Ed,
I am quite new to this industry. Ever since I first downloaded RealNetworks' player only a month ago, I have been fascinated by the relatively high quality of audio it could deliver to my thin 28.8 pipe and by the way streaming media was able to solve the latency problem. It simply astounded me that I could listen to a symphony, a conference call, or a BBC broadcast with less delay than it takes to load a graphics intensive web page.
As the Keynes quote on my profile suggests, I tend to prefer larger cap stocks, not because my liquidity profile demands it, but because most institutions can't even look at a stock like AXC.
I am mostly impressed by content producers and aggregators and technology enablers, hence have taken positions in BCST and RNWK.
I have been impressed, however, by a number of webcasters, among them TVonTheWeb, and feel that these creative webcast studios are very undervalued. Therefore I have taken a very small position in AXC.
It is the technology side of the AXC equation that is harder for me to assess. I am not an engineer. So I must go simply by obvious questions like market share, platform strength, and standardization. I tend to view the market as a very rational price signaling mechanism, hence I tend to be sceptical of bargains. I do not buy lottery tickets and am not obsessed about discovering the "next" anything.
I know that technology patents often have a very short shelf life and would be extremely surprised if the extensive portfolio of patents Ampex has developed for reel to reel storage of analog video has much application if any to the emerging IP multicasting market.
If it did, I would expect to see their sales exploding with the astronomical early growth rate of this nascent industry. Instead I see sales declines by AXC. Furthermore I would expect that AXC's total annual sales is probably much less than EMC's R&D budget. So what hope do they have to carry over their leadership of a bygone analog era?
What Ampex does possess is a brand name, a washed out stock price and some brand partnerships in some potentially lucrative webcast studios.
You see, I have been conservative and have written off the technology. So I was surprised to read you wax so bullish about the technology and the potential to commercialize it. I think their content partnerships may prove valuable, whether or not they succeed in using them as a springboard to sell their technology. My natural inclination would be that if their tech were any good, they would be able to sell it to nonaffiliates.
Your comments most welcomed. I am only doing my DD. Do not be offended by my scepticism. It's just part of my empirical process.
Sam |
