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

To: 2MAR$ who wrote (25412)	11/10/1999 12:09:00 AM
From: $Mogul	Read Replies (2) \| Respond to of 108040

WFII, JNIC should provide some real BEEF!

To: 2MAR$ who wrote (25412)	11/10/1999 1:07:00 AM
From: WhatsUpWithThat	Respond to of 108040

PVSW: READ THIS On theStreet.com this evening (I don't normally post their columns, trying to honor their request, but this could be too harmful to those in the stock): As you might expect, a lot of the presentations here are chipper and upbeat. CEOs boast of massive market opportunities, CFOs put up charts where all the lines go up to the right. Even the money managers chatter about great picks and undiscovered gems. So the mood in the Pervasive Software (PVSW:Nasdaq) presentation was striking. CEO Ron Harris was glum and shaky. CFO James Offerdahl was despairing. The corners of his mouth turned down as he told the Pervasive story to an audience of just two investors and a reporter. Harris tried to sound upbeat, but the attempt was halting. "We have an excellent track record of execution and accomplishment," he said. "And we're getting a lot of recognition -- uh, especially in the last 30 days." In the last 30 days, of course, shares of Pervasive Software nose-dived 75% from 36 1/8 to as low as 8 7/8. On Oct. 22, the Austin, Texas-based company announced solid earnings. But in a conference call shortly thereafter, Harris told analysts that domestic sales of Pervasive's database client server software, called Pervasive.SQL, were slumping badly. The company had a host of excuses -- problems with a third-party distributor that left $500 million worth of product on the shelf, a recent move of its sales staff and a shortage of shrink-wrapped product. But Wall Street punished the shares. The concern is that the company, which Robertson Stephens just brought public in the fall of 1997, peaked about six months ago. Indeed, Harris practically admits that. "The client server space is growing at a slow pace, just 12%," says Harris. "We're growing much faster than that, but in a slow-growing space. That's why we're repositioning ourselves into a market that's growing faster. Web software will be growing at 98% a year, at the same time we're making R&D investments in mobile and wireless, which will be growing at 50% a year." But as it stands now, Pervasive sits solely in a dead market. The wireless products, Harris says, may produce revenue as soon as the first half of next year. Seventy percent of its current revenue comes from database software. And short of hiring more marketing people, the company doesn't seem to have much of a plan to save that product. "It's not dying," says Harris. "But I think in a macroeconomic level, client-server software has probably peaked." Pervasive's Database Sales 70% of its business looks to have peaked. (In millions of dollars in revenue) Source: Pervasive Software; Q1 2000 is based on a fiscal year. The stock rallied in early trading today (perhaps TSC readers hoping I'd write a nice piece? Fat chance), but not everyone at AEA was convinced by the story. "I don't know how they're going to get their main database business working again," says one fund manager, who attended the presentation Monday. She has no position in the stock and asked not to be named. "And management isn't really exuding much confidence." Harris is trying. "I think internal issues have been our biggest inhibitor. Getting our sales force deployed and to get them productive is in progress," he says. "We've had to jump a few big hurdles. A lot of our domestic performance has a lot to do with our internal issues, not the macro issues of client server." Investors seem to agree with that tautologous irony; the problems with Pervasive are pervasive indeed. (By Corey Johnson at the AEA Conference) I'm not advocating a position; I like this company and I REALLY respect Tango...but this may not help the stock tomorrow... FWIW WUWT