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 : Wind River going up, up, up! -- Ignore unavailable to you. Want to Upgrade?

To: Mark Brophy who wrote (6836)	11/20/1999 12:44:00 PM
From: contax	Read Replies (1) \| Respond to of 10309

Mark, I don't understand what you have against Jerry Fiddler and WINd River Systems, because no matter what they do, it just does not seem to be good enough in your book. I guess when H&Q's Matt Belkin said, and I quote, Company: Wind River Systems Price: 35 Recommendation: Buy Notes: a, b,f Analyst: Matt Belkin 415-439-3585 Date: 11/18/99 Wind Reports Strong Q3. Raising Revenue Estimates, Price Target to $60. * Wind reported a strong Q3. Revenues of $44.6 mil easily beat our $41.9 mil estimate. * Earnings were in line with our 17" expectation as Wind continues to invest in the post-PC opportunity. * Wind continues to gain momentum in the embedded market, as evidenced by several strategic agreements announced during the quarter including Intel and Lucent, as well as Liberate's announcement that Cable and Wireless will begin to deploy its set-top box technology. * We continue to believe Wind represents an excellent play on the whole Internet appliance and Internet infrastructure opportunity and expect more agreements of a similar nature in the near future. * As a true provider of Internet-enablement technology, we believe Wind is capable of achieving a valuation similar to that of its target markets and are raising our price target to $60, or 13x times our new sales estimate of $205 million, up from $190. he is, as far as you are concerned, just another highly paid dumb analyst who obviously does not know what he is talking about, eh? Since I think that the market valuation that WINd enjoys today has everything to do with it's strong fundamentals, and you think otherwise, therefore, going forward one of us will obviously be proven wrong. As an unabashed WINd bull, I am willing to make you a wager: If WINd's stock price does not at least double in the next 6 months, I will send you a case of your favorite wine and if it does, you will send me one instead. If you are game, then I am willing to listen to your inane diatribes against WINd, but if you are not, then please find yourself another pastime... Karim

To: Mark Brophy who wrote (6836)	11/20/1999 2:38:00 PM
From: Richard Karpel	Read Replies (2) \| Respond to of 10309

It cost him $1.3m to recruit an employee with a $240K salary! Mark, I didn't even realize that WIND spent so much in the recruiting process, and while I have no idea how their performance compares with the industry average, I trust your opinion in this matter. However, I'm talking about a different issue. My sense of what has happened at WIND in the last year is as follows: Ablemann, who was hired several years ago to bring discipline to a troubled organization, was finding it increasingly difficult to move the company at Internet speed. He's a manager, not an innovator, and my guess is that he was resistant to the kind of bold moves that WIND had to make to continue to grow in a business environment that has been transformed by the emergence of the Internet. Meanwhile, Fiddler -- the visionary who saw which way the wind was blowing (no pun intended) -- got tired of fighting with Abelmann and forced him out, turning instead to a CEO who (we hope) is comfortable in a transformational environment and who subscribes to the tenets of creative destruction, i.e., a guy who eats change for breakfast. It reminds me a little of Bill James' theory of baseball managers: Different situations require different managers. If you have a team that's coming apart at the seams, you want an intense, in-your face kind of guy who can bring discipline to the troops (e.g., Billy Martin, Dave Johnson); if you've got a group of professionals who know their roles and know how to play together, you want a relaxed, hands-off presence (e.g., Joe Torre). Five years ago, WIND needed Ron Ablemann; in the past year, it became apparent to Fiddler that it was time for someone else, and he moved quickly to make the change. Wind River fell earlier in the year based on Microsoft fears and rose recently based on the ebbing of those same fears. As I said in my #4, the decline of Windows CE has had a positive impact on WIND's valuation. However, the message that I was responding to assumed that the "MSFT court case" was the catalyst for WIND's appreciation, and I don't believe that to be the case. WIND's share price had already doubled in six months by the time the MSFT decision was announced two weeks ago. The eight points it's tacked on since then probably had more to do with tech stock exuberance than Judge Jackson's opinion. The market is even willing to go along with the accounting flim-flam. Since when is hiring an employee and developing admin software characterized as non-operational costs? ... The sad reality is that earnings are declining despite revenue and market share increases. The market would never have ignored that in a less euphoric tech stock market. Again, although I am not an expert on the rules of accounting, I think that you're probably right about all the points you made above. I think that what we are seeing is Fiddler's willingness to take risks because he didn't want to see his stock get slammed (which is what would have happened if they missed earnings even by a penny) and because he is confident that the company is about to make a transition that will lead to the kind of growth that will make a few pennies of earnings irrelevant and eliminate the need to resort to accounting tricks. Fiddler and St. Dennis subtly warned us about a short term decline in earnings in the post-INTS acquisition conference call when they talked about pricing pressure on VxWorks and the development tools, and the need to refocus its business on "new opportunities in high-growth Internet-related markets and professional services consulting." WIND is in the middle of re-inventing itself and there are going to be huge risks in the transition. However, I am growing more confident every day that Fiddler has the vision to see the playing field; the understanding to design a winning strategy; and the skill to put the right players on the field.

To: Mark Brophy who wrote (6836)	11/21/1999 5:10:00 PM
From: Joe Smith	Respond to of 10309

"The market is even willing to go along with the accounting flim-flam. Since when is hiring an employee and developing admin software characterized as non-operational costs? " Mark--Wind River does not decide what is an operational cost, Price Waterhouse does. Sometimes I get the feeling that you shoot from the hip...