Tom, I can remember a similar experience to this with another software stock, several years ago. I had picked up a large position in Informix a few years ago when they had announced that they were coming out with a new version of their PC Network database product. I did all my research first and it seemed that their product was going to be ahead of all of their competitors. It seemed like a sure thing to me.
After I plunged a lot of cash into IFMX, the stock started down and just kept dropping and dropping. I tried to average down and kept getting burnt. For a long period of time, the company would not explain why the stock was going down, or issue a satisfactory answer to me. I'd call them and they would say that business was as expected and they could not understand why the price had dropped. Of course, I felt that something was being covered up. I was wrong. (Of course, I am now getting the same negative vibs holding TLC stock!)
After about six months, the stock started up. I was able to get out with about a 10% profit. I was glad that I was able to cover my losses and get out with a profit. But, I sold because of the stress and the relief. I sold too early. IFMX kept going up and up and up.
There were other similar experiences, such as this one. I don't know if the reason management stays away from news releases about it's stock price or "how it is doing" is because of potential stockholder law suits?!
On the other hand, there are companies like Champion Enterprises, CHB, a mobile home builder, where the company president keeps stating the company goal that they want to grow earnings, over a three year period, at 20% and return on equity at 30%, and comes out with early "good" earnings news, from time to time. In fact, that was another stock that kept going down, a couple of years ago. I was losing a lot on that stock. But, the president kept stating the company goals, which was very reassuring. I stayed with it and it's turned out to be one of my best investments. It would be nice if TLC's management would do something similar.
I like TLC's entry into the overseas markets, and the direction that they are setting. They have been an aggressive company. Perhaps they have gotten ahead of themselves. But, their last earnings report showed an improvement in margins and that they were able to combine all of the companies very effectively. I was impressed with their last earnings report.
Let's hope that we get some good news from tomorrow's meeting.
Sorry about the digressions.
Your suggestion about the employee stock option plan "buy-back" is excellant. I hope the management is reading this. I wonder if they do follow our notes at all?
Regards, Bob |
