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Technology Stocks : Axon Enterprise, Inc. (AXON), formerly Taser Intl. -- Ignore unavailable to you. Want to Upgrade?

To: Bid Buster who wrote (428)	1/11/2005 3:49:30 PM
From: John Carragher	Respond to of 974

Taser's cozy customer relationships Commentary: More on Novastar and squeezes in reverse By Herb Greenberg, CBS MarketWatch.com Last Update: 3:32 PM ET Jan. 11, 2005 E-mail it \| Print \| Discuss \| Alert \| Reprint \| RSS Editor's note: Adds link to Herb Greenberg alerts page. SAN DIEGO (CBS.MW) -- Taser's stock has been stunned in recent days by news the SEC was probing the safety of its products and a recent order from a distributor. In a letter to shareholders Tuesday morning, the company said the inquiry "may not be resolved quickly." Free! Sign up here to receive our Weekly Roundup e-Newsletter! TRADING CENTER Get up to $500 in commission-free trades INFORMATION FOR TASR: Create an alert for TASR Add TASR to my portfolio More cool charts on TASR Discuss TASR NEWS FOR TASR Taser's cozy relationship with customers U.S. stocks slide on sluggish start to Q4 earnings Highlights of stocks moving Tuesday More news for TASR Quote & News Charts Financials Analysts Options SEC Filings TRACK THESE TOPICS My Portfolio Alerts Company: Taser Intl Inc Add Create Column: Herb Greenberg Create Company: Novastar Finl Inc Add Create Company: Krispy Kreme Doughnuts Inc Add Create Get breaking news sent directly to your in-box Create a Portfolio \| Create an Alert While regulators are at it, they might as well see if the company is properly disclosing its relationship with customers. In late December, Minneapolis television station WCCO reported the Minneapolis police launched an internal investigation of its stun gun point man who was also paid by Taser (TASR: news, chart, profile) to train users outside of the department. The report included an on-camera interview with Deputy Chief Tom Dolan, who said the officer, Ron Bellendier, didn't have permission to work for Taser. He said Bellendier was the department's chief Taser trainer and was responsible for monitoring Taser use within the department. He was also believed to have influence over recommending how many guns should be purchased by the department. In response to my questions, a police department spokeswoman sent a copy of Bellendier's employment history, which shows he resigned on Christmas Day, three days after the report aired. One week later, the 16-year Minneapolis police veteran was hired by Taser as a regional manager in charge of the Midwest. Bellendier's dual role in charge of Taser training for the Minneapolis police department and as a Taser "master instructor," paid by Taser, is "sure cozy -- uncomfortably so," John Gavin of SEC Insight wrote Monday in a report to clients detailing the WCCO report. Like many local TV reports, the WCCO piece was ignored by other media; Gavin, who lives in Minneapolis, only heard about it after mentioning Taser to someone who had seen it. In its last annual 10-K filed with the SEC, Taser said that it had certified more than 11,500 "law enforcement training officers" as Taser instructors. Of those, 263 are certified by Taser as "master instructors" who train "other law enforcement and corrections agency trainers, not just end-users within these organizations." The company says master instructors are paid for each session they conduct. "These training sessions have led directly to the sale of Tasers to a number of police departments," according to the 10-K. Taser President Tom Smith told me the master instructors are paid a cash consulting fee and do their training when they're not on duty for their regular job -- much like police officer who moonlight as bouncers "at a local nightclub." Isn't it a conflict for an active police officer whose department uses Taser guns to also be employed by Taser? "That's between the officer and that department," Smith says. A department spokeswoman says the investigation ended when Bellendier left the department because there can be no outcome for a non-employee. However, sources say the department is continuing to look deeper into whether Bellendier, who had a flexible schedule, did work for Taser while on the department's clock. A bigger question: In the law enforcement industry, was Bellendier the rule or the exception? Meanwhile, one of the knocks on Taser from Gradient Analytics was that the company recorded an unusually large sale to a distributor at the end of its fourth quarter. Such big end-of the-quarter shipments often suggests a company has stuffed its distribution channel by convincing customers to take more product than they really need to help boost revenues. Enter Tuesday's letter to shareholders: Taser said it may see "delays" in orders growth during the fist half of 2005 as customers "test and evaluate potential new entrants." Since when has competition ever been an issue? For what it's worth, stuffing also tends to steal sales from future quarters