It's really still a mystery why the stock got slapped and slapped down again. From my recollection, first an analyst from H&Q got pissed that he didn't get called back before the weekend and said the earnings might be a little bit back end loaded. Earnings growth was reduced a bit, but everything was basically OK. Then came an announcement that Tornado for Managed Switches, TMS, would be delayed a couple of months while WRS worked out some bugs with their newly acquired company, Xact. Then we got an announcement that Tornado 2 would be delayed a few weeks to weed out some bugs before release. It was released three weeks late. Then came an announcement of CEO, Abelmann's stepping down and that the company would look for a new "world class CEO". At the same time, we learned the the Embedded Systems Forum would be cancelled due to problems in getting enough publicity. Seems like they have had some execution problems this year.
In the background, I think many are skeptical of the high growth rate in the face of MSFT's entry into the embedded software space. Also, I know that WIND was a target of a short seller's newsletter in December 1997. It's hard to say, but it could have dropped due to a concerted attack by a hedge fund. During the drop, a whole crew of strangers showed up on this thread applauding the fall and announcing the death of the company. Also, the software industry has had problems in general this year. Witness PSFT, SAP, etc.
Despite that, WRS now has a major new release of Tornado as well as all the other projects mentioned in Posts 5099 and 5156. We can expect 0.77 for the year and 25% (min.) growth. I think it's safe to say that we will be surprised on the upside by the growth of the company and its prospects. The market opportunity is as good as it gets and the company hopefully will get its act together soon, perhaps with a CEO who will amaze even Wall Street.
Myself, I am buying as much of the stock as I can and have call options as well. I expect a breakout around 1Q earnings release next week if the company shows it can maintain profitability. Then, when a new CEO comes on, I expect the stock to respond positively to the good news. I only hope that the company doesn't get knocked again by a generally staggering stock market. Or maybe the company will be seen as a safe place to put money while the rest of the market slides?
We are still awaiting news from Allen Benn on the these and other developments and WRS's future prospects. Wind River Systems and the thread need some more light. |
