Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Identix (IDNX) -- Ignore unavailable to you. Want to Upgrade?

To: jean who wrote (14214)	7/12/1999 3:42:00 PM
From: David	Read Replies (2) \| Respond to of 26039

Some cautionary thoughts before leaving for a long vacation in a couple of hours (back by August 1, although I may have Internet access from time to time earlier) . . . Although we see wonderful opportunities in front of us, and numerous hints of major deals unannounced, IDX is in managerially uncharted waters and faces some new risks. The older risks -- building a financial base, developing or acquiring products, positioning the company, and finding high-powered allies -- have been largely surmounted. I don't need to discuss them here. The new risks are a bit more mundane, and surely within the ability of IDX to control: Spreading critical staff too thin, taking the existing base for granted, losing focus on the complete strategic needs of the company. For instance, although the AFIS market is not the future of IDX and will not be a source of great bottom line growth, it is still an important part of the present as the cash flow base for exploring all the dazzling bio-ID possibilities. We have seen DBII take the UK contract, the INS contract, and win Tennessee. IDX was in position to put DBII away last year, and instead seems to have downplayed this part of the business (replacing the old guard, maybe not reinvesting in upgraded technology) to the point where DBII is probably gaining market share. We haven't seen any major AFIS deals announced lately. While it may be unreasonable to expect IDX to reinvest in AFIS at the expense of bio-ID, too much neglect of this business will squeeze cash flow. The recent refinancing at the present price, if not put to immediate good use in bio-ID, would represent some of the price shareholders might pay if the AFIS business is not looked after. The same could be true, even, in parts of the bio-ID business. IDX has to ensure that it maintains its interest in the developing BioAPI, especially now that Intel and its allies have been brought under the tent. If the wrong specs are adopted, IDX would have to play catch-up to bio-ID competitors. Regarding Compaq, sales are respectable but, frankly, a little lower (at about 100K units) than I projected some time back. With Compaq in turmoil, IDX needs some extra attention to its still-early OEM deal to protect its position there. At the moment, CPQ is the crown jewel. And we just don't know if there are enough key players in the IDT group to cover all the bases they need to look after. IDT has never been in the position of doing more than selling to new buyers; IDX has not had to handle major OEM accounts, either. My main point is that with change, even potentially very good change, comes new problems as well as opportunities . . . and we should discuss this side of the business, as well.