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 : 3Com Corporation (COMS) -- Ignore unavailable to you. Want to Upgrade?

To: mr.mark who wrote (38904)	2/4/2000 2:03:00 AM
From: Mang Cheng	Read Replies (1) \| Respond to of 45548

Kevin Podsiadlik got me workig so hard tonight, it's insane. Found the following article which told the whole story why IDTC is worth less than NTOP when IDTC holds a majority share in NTOP : December 9, 1999 2:27pm "IDT wants better treatment from shareholders" By Sergio G. Non 22GO ZDII Yesterday afternoon's earnings conference call for IDT Corp. (Nasdaq: IDTC) went downhill with the very first question: "Hi, can you just talk a little bit about any alternatives the board or the company may already have evaluated in realizing value in the company's holding in Net2Phone?" Responded Norman Rosenberg, IDT's vice-president of finance: "I'm not sure that I fully understood the question. Maybe you could repeat it?" There's your capsule version of IDT's problem. Shares of the communications company slid 5 percent this morning and stayed down going into the afternoon. The stock hasn't been anything to crow about in recent months, as IDT shares have traded in the 19 to 27 range for the last few months. IDT makes most of its money by carrying signals for other communications carriers and selling pre-paid calling cards in retail, but few people give a damn, judging by yesterday's questions. Most stockholders see only one thing: Net2Phone (Nasdaq: NTOP), with a valuation light-years ahead of IDT, though the latter owns 48 percent of the former's stock. Most of yesterday's Q&A boiled down to two points: why is Net2Phone worth more than we are? Why aren't you telling Wall Street how great we are? After 20 or so minutes of that, IDT CEO Howard Jonas exploded. "This is ridiculous," he declared. "We're sitting here piling up assets, making money, and building the business. And if the market doesn't reflect that, eventually the market will, it can't deny reality forever." Maybe IDT does have a profitable, growing wholesale business. Perhaps its international ventures with companies such as Telefonica are goldmines. But other things speak for themselves. IDT missed estimates by a penny per share in the latest quarter and would have missed by more if you exclude a pair of one-time revenue gains. And the Street didn't force IDT to devote most of its public relations to Net2Phone over the last year. As Jonas admits, IDT intentionally pulled back on PR for itself to focus attention on Net2Phone's IPO. So IDT spawned its own problems. Many folks bought IDT stock this year for one reason, Net2Phone. But IDT doens't want to spin off its NTOP holdings because of tax liabilities. "It would cause a humongous tax burden to IDT that would put IDT out of business," CFO Stephen Brown said. "It's not a possibility." Whether true or not -- some fund managers on the call were skeptical -- it's not what shareholders wanted to hear. They probably wanted to hear this even less: "The fact that I'm talking to you now is part of the problem," Jonas said to one investor. "A couple of years ago when we did these conference calls, every person on the line was an analyst for a major investment bank. Now we're basically dealing more with individual investors who are upset that their stock isn't up. And that's an indication that the right people aren't listening, and we're going to change that." Granted, every company prefers a heavy dose of stable institutional holders. But to out-and-out dismiss individuals as not being the "right people" indicates more than a hint of arrogance. So does this offhand joke made by Jonas near the end of the call: "You wonder (if) an LBO (leveraged buyout) will stop the questions?" IDT created its own situation. Now Jonas doesn't want to hear it from Wall Street? Then he shouldn't be leading a publicly-traded company. I don't know if IDT's business is a great investment or not. But after hearing management's attitude during yesterday's call, I don't know why anyone would even care. zdii.com Mang