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Strategies & Market Trends : Cents and Sensibility - Kimberly and Friends' Consortium -- Ignore unavailable to you. Want to Upgrade?

To: Bryan who wrote (23503)	11/4/1999 5:27:00 PM
From: swisstrader	Read Replies (1) \| Respond to of 108040

PVSW - update on annual mtg... Thursday, November 4 Pervasive's investors undaunted By Heather Cocks American-Statesman Staff Thursday, November 4, 1999 After Pervasive Software Inc.'s recent one-day, 24-point stock plunge, Ron Harris came to Wednesday's annual meeting prepared to face a firing squad. It never came -- and neither did many shareholders. About 35 curious but generally supportive investors lobbed questions at Chief Executive Harris about Austin-based Pervasive's post-plunge business plan. No one even touched the two rooms that stood ready to accommodate any overflow. "It surprised me. I expected a mixture of confusion and hostility, and a lot more people," Harris said. "If you check the chat rooms, I'm public enemy No. 1, but I take this (low turnout) as a good sign that people are confident and can see beyond one quarter." Just two weeks ago Wall Street was smiling on Pervasive, pushing its stock as high as $36.25 after fiscal 1999 results showed 62 percent revenue growth and earnings that almost doubled from 1998. Then the bottom dropped out, and so did investors. On Oct. 22, when the company reported first-quarter earnings for 2000, it told Wall Street analysts that it plans to spend an extra $13 million on its Web-based Tango software, which is expected to prevent Pervasive from turning a profit until 2001. Pervasive's flagship product has been database software that can be built into other software programs. On news of what seemed like a costly commitment to the new and still-unproven Tango, most analysts balked, interpreting the move as a total shift in focus. Wednesday, shareholders' questions were not angry or antagonistic in tone. Most in attendance sought assurance that Pervasive could meet its fiscal goals, and others just wanted a clearer explanation for why the investment in Tango got such a chilly reception from analysts. "It's obvious you have a high opinion of it, but Wall Street doesn't have as high an opinion as you do," shareholder Steve Campbell said to Harris. "I'm just wondering why." Harris defended the investment in Tango. He said part of the money will go toward publicizing partnerships and boosting awareness of its brand, which Pervasive lacks because it makes behind-the-scenes technology. He did admit Tango might not have succeeded as quickly as expected, but Harris told shareholders that spending money to promote Tango -- acquired last year when Pervasive bought Toronto-based EveryWare Development Inc. -- puts the company in line with an industry life cycle that's moving into Web-based software. "Tango has only been around for a year and we think we're just getting started," Harris said. "Wall Street wants immediate results and a quick hit on revenues, but if (Gov.) George Bush hadn't been out there spending money early, he wouldn't have a prayer in November 2000." Shareholders questioned Harris about whether the relatively low share price would entice a purchase or takeover attempt. "We have no desire to be acquired," Harris said. "If someone offered a zillion dollars, we'd do it in the shareholders' best interests. But if they try to bargain-basement the sale of Pervasive, we would not do it." He said the company's ultimate goal is to embed its software in Web-enabled devices, like wireless handheld computers and Internet appliances. But despite Harris' emphasis on long-term goals, he couldn't ignore the present. "What hurts the most is knowing how much people lost," Harris said after the meeting. "And the abuse is the hardest part. But we have a clear vision of what we want to be when we grow up, and I'm not letting this change our focus. "If I want to bet on the short-term, I can go to Vegas."