Bob, since you've studied analysts and are something of an expert in the field, I trust your conclusions. If you say that "KP may earn some greater trust from the analysts" at some stage, I'll accept that. My misgivings have to do with timing. I know it takes quite some time to regain trust once you've lost it. This is a sensitive time for the stock, and the last thing it needs is "credibility gaps" with the analysts. I've been pounding this theme ever since last summer - and the loss of institutional money, which I feared, was a devastating blow. The street will forgive in time - but the timing could not have been worse. I know most on this board don't want to hear it, but as credibility gaps and trust goes, I think KP has as many if not greater problems with retail investors. He's burned them very, very badly by several actions last year. When you remove both institional money, and retail, you get what you had for some time now: no demand for NITE shares.
My hope is as follows:
1)KP levels with both analysts AND *individual investors*. No more evasions, both should be informed at the same time. The 3Q disaster should not be repeated. Guide analysts, but do a good job of it - and above all, don't leak critical information without also *simultaneaosly* letting the individual, common shareholder in on any revisions to outlook.
2)Level with all actions that may affect shareprice value, unless there must be confidentiality for business reasons. No more stuff like the secret cancellation of the buyback program.
3)No more lies and/or evasions by IR. Let IR in on all the pertinent information. There is nothing worse than IR that's perpetually underinformed by management. No more stuff like "we don't know why the shareprice is sinking" like last summer, while they knew full well - or SHOULD have known. Management needs to keep IR up to date, and IR needs to level w/ investors.
4)Fire or reorganize the PR department. It is a disgrace. Keeping individual investors as well as analysts up to date on all relevant developments is critical to the investment communities comfort level and education about NITE and its business. Otherwise NITE comes across as something of a black box - information flows in, nothing comes out. So many analysts and individual investors are still confused as to the ECN issue, the OLB connections etc., etc. To have silence for weeks on end, is unacceptable. KP should lose the idea that PR is not "classy", or that things should "speak for themselves" - that's a pre-historic conceit; there are very good reasons why PR departments exist. Keeping investors both informed, and educated, is critical.
5)KP should stop making crazy off the cuff remarks. No need to offend any class of investor, including "momentum" investors.
6)KP needs to decide how he wants to project NITE. He has made several zig-zags which have only served to confuse. First he complains that NITE doesn't get OLB type p/e (this was early last year when OLBs were hot). Then he tries to hitch a ride on the inets. Then he positions the stock as a value play. Enough. This is amateurish in the extreme, and very damaging. Guys like Wetherel, Case, Bezos, Steve Ross etc., have a very clear conception of what their company is, where it belongs, and they articulate it consistently. Even MSFT does a better job of positioning themselves publicly (and God knows they've switched and struggled). What worries me about KP, is that I suspect that he actually never gave any deep thought to how NITE must present itself - he runs the business, and figures the image is unimportant - which is good for business, but which kills the stock (and as I always say - in the end, stock IS business - that's how you get to leverage capital for acquisitions, protect yourself from hostile takeovers etc.).
5)NITE should get a spokesperson. Or at least KP should take some kind of course. I know this seems like an issue that is petty in the extreme, but I believe that it makes a real impact. KP comes across as simultaneously arrogant, abstruse, snappish, and uncommunicative. Just watch those interviews - appalling. He needs to learn some people skills too in handling analysts. We may think whatever we like about Charlotte C., but KP surely could have handled her better in the cc. No need to be so brusque, aggressive and unpleasant - he could still have denied her request, but done it with better manners.
Well, that's a start. As to the stock selling - I wouldn't count on any change. If one got really ambitious, I'd not only suspend the selling until the stock reaches a specific level, but I'd restructure his compenstation. No more fancy footwork and double dipping. Just a base salary and options linked to stock performance - that way you get ALL shareholders interests aligned. But that 'ain't gonna happen.
For that matter - none of it is going to happen. So all that is left is for people like me to bitch. And NITE will continue to be at the mercy of the OLB perceptions and their vagaries in the market. Absurd, but inevitable given the cluelessness at the top. Such a great company. Could have been such a great stock.
All in my opinion only.
Morgan |
