To: Lee Kennedy who wrote (7219 ) 10/22/1997 2:58:00 PM From: Gary Green Read Replies (4) | Respond to of 12454
Lee: I now do not have a clue why management needs more money I came to my first hypothesis (which I now think is wrong), by working backwards: I looked at how much new capital management apparently was trying to raise, and as I said, giving it the benefit of the doubt, attempted to identify a scenario where the money would be needed. Using the experience of my firm's clients as a guide to my mental excursion, and knowing that some of them needed what I called rainy day funds to insure that they did not run out of cash in the midst of implementing a big job order, I offered it here as a possible alternative to what other posting parties were calling in their submitted posts, greed by management, fraud and/or stupidity. My goal was to stop us as a group from hysterically leaping off the bridge. My theme was, there will be plenty of time to leap later if we find out that the worst fears were true; but with what we know at this stage, perhaps there is a good (for us) reason why the company sought to enlarge the float. The stability of the stock price seemed to confirm that people with more insight into the company than I have were not close to pressing the panic button. However, after mulling over the scenario I hypothesized, I tried to get a better grip on what kind of deal CCEE was likely to enter into with BT. My original premise had BT as the big customer that would itself use dbExpress to service its customers. In my search for confirmation of my thesis, and in considering some of the information I read in Steve Turner's e-mail to me (which clarified the technical aspects of dbExpress),it dawned on me that BT would probably store data on its own internet site, and that it would make the material available to its customers. Since each customer that wanted to take advantage of this would need dbExpress software, I began to see that BT probably would sell the software to its customers, not give it to them. This would make BT and CCEE co-marketers, and would enlarge the potential profits for CCEE to much higher levels than what I thought it could earn from having just one large client (i.e.,BT). I found support for my new theory in earlier posts here on this thread since the gist of the marketing plan originally was close to what I have just described--when CCEE was working with Perrot and IBM. I was sidetracked in creating my earlier hypothetical because unlike those two, I did not see BT as a seller of software, but rather as a consumer. But after contemplating what I would do if I were CEO of BT, I realized that BT, which is about to lose its monopoly in England, probably is hungry for new sources of revenue, as well as products to make it more competitive. Hence, it made sense to re-conceptualize BT as a software seller--with dbExpress as the product. If CCEE is now a marketing joint venturer with BT, the critical need to deliver a flaw-proof product disappears because BT would want to see the product sold (to earn it revenue) and would be less critical of efforts that might be needed by CCEE to fix bugs etc. Therefore, I now am no longer enamored with my rainy day fund idea; and without that, I suppose I will have to await either announcements or the shareholders' meeting (which fortunately will be held in Philadelphia--within walking distance from my office).