Mark: Some Random Ideas About WSTL
Now that the recent MZ foray into the institutional world has apparently flopped (I don't see a ground swell of palm thumping by any analyst or even a hint of public interest in the stock), I wonder what is left for MZ and his team to try. He can sail off into the sunset on vacation, but unless I read the tea leaves inaccurately, something must be done yesterday to meet near term payrolls, pay utilities, buy toilet paper, etc. His absence would be a good time for changes in the management-its been done before.
As of the last quarter, they had about 15 million in cash equivalents. With the 90+ person layoffs, associated severance payments, continued forward pricing product losses, etc. the bank account must be getting pretty low. It must not be a pretty sight to the treasurer. If MZ has secured financing, he has decided not to make it public, hence the stock bleeds and bleeds.
If the Board of Directors had even a hint of fiduciary responsibility to the public shareholders, they would not have let the situation deteriorate to the present level. But alas, they are no doubt just going through the motions, as typical lackeys of the Penny/Simon trust, and are content to receiving their $20k per year, and having a good time at their meetings at the expense of we WSTL longs, aka suckers. The BEL and Ameritech representatives on the Board have certainly done a lot of good for the company-Not.
What I truly can't understand is what would motivate the Penny/Simon clan to continue with the MZ management team? MZ will remain in place as long as they want him to. They no doubt have some exaggerated idea that their company is worth more than the public is presently evaluating it at. The present market cap of the company is nearing the chump change area for a company like Lucent. If Westell's participation in LU's switches are at all important, it would seem an offer from them to buy WSTL would have already been made. If Penny/Simon doesn't want to sell, that's their business. They are apparently content to ride this horse completely into the ground. Why?
This is what we suckers get for investing in an essentially private company, as extremely minor stakeholders. I can see we small fry making this mistake, but how can institutions, like Amerindo, Calpers, etc., if they still own a piece of WSTL, be so equally stupid? How much longer do we have before Chapter 11 approaches? It all depends on Penny/Simon. I urge them to swallow their pride, and sell whats left of this once promising company, before it becomes completely worthless.
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