Why Alydaar's numbers never seem to add up and what exactly is "Gruderspeak" ?
Much like the way Mr.Mitchell posts, Alydaar and Bob Gruder also like to talk about only one side of the equation.
Time after time we have seen Mr. Mitchell talk about how great it is that ALYD has gone from some $37,000 in revenues in 1996 to $11 million in 1997. He says " now that is growth "
However, what he leaves out and makes sure he doesn't address is the FACT that although the revenues have increases by an incredible amount, more than 29,000%, they have resulted in more than a 55% increase in loses. In fact, once ALYD reports their FYE '97 numbers, we will see that the loses have increased from some $5 million in 1996 to approx. $8 million in 1997.
Yup, that is sure some "growth".... but I don't think it is the kind of growth investors and Wall Street are looking for.
Gruderspeak?
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First "slick" Bob says that ALYD will be profitable in 1996. Then when ALYD doesn't meet that prediction, he says the following in an Aug. '97 interview with our favorite paper....
The Charlotte Business Journal: August 11, 1997
amcity.com
While expectations remained high, Alydaar lost $5.13 million last year on
revenue of $37,500.
Gruder attributes the poor returns to high front-end infrastructure costs, such
as computers and staffing.
And, he adds, his predictions have been misconstrued in some media reports.
The Wall Street Journal recently reported criticism leveled at the company by
stock analysts concerned that it was promising faster expansion than was
possible.
Gruder says he was asked to predict how well his company would do in
virtually perfect market conditions and then was quoted making grandiose
claims as reality.
"I was quoted saying we'd make a profit by fourth quarter (1996) and what I
said is that I would hope we'd make a profit by fourth quarter," Gruder says.
"Well, we are making a profit now. Two quarters late isn't bad."
Ironically, this is the same article in which Mr. Mitchell gave his own spin on ALYD.
Jeffrey Mitchell, an Alydaar investor in Westport, Conn., is a firm believer in
Alydaar's quest.
"Many companies thought they had the time and ability to fix the problem
themselves, only to find Year 2000 is more complex than they first realized,"
Mitchell says. And that's where Alydaar comes in.
Mitchell wouldn't say how much stock he owns. But he did say he's invested
his entire individual retirement account in Alydaar.
"Forget the hype and forget the promises," Mitchell says. "There's an
expression in this business: 'Show me the contracts.' And Alydaar has the
contracts."
Well, I hate to tell you Mr. Mitchell, that there is also an "expression" in the business that is called "show me the money" and so far, all that ALYD has shown is an increase in loses.
Today, ALYD is not a better company, it is just a bigger company. We see "Slick" Bob attributes the poor returns to high front-end infrastructure costs, such as computers and staffing.
However, ALYD is far from finished with adding staff. In fact, according to Bob's own previous estimates, ALYD will have 500 people by the end of 1998 and a 1,000 by the end of 1999. If he blamed the poor returns to high infrastructure costs back in Aug. 97, what is going to happen when ALYD has to keep hiring in a marketplace that is in a "bidding war" for resources and salaries are expected to rise 30% to 50% by the end of this year. One can only wonder what the excuses will be then.
Next we see that Gruder clearly says "WE ARE MAKING A PROFIT NOW" in Aug. of 1997 ... That is in Q3 of 1997. Everyone now knows that this statement is FALSE. This is a prime example of Gruderspeak. Notice how he waffles his way out of one lie and into the next one. This guy could even teach Clinton a few tricks.
When I brought up this issue on this thread, I was attacked by non other than Mr. Mitchell who first tried to cover up for Bob, but then had to admit that he was wrong but tired to dismiss it as old news. Never mind the fact that a CEO of a publicly traded company knowingly, making false statements about the company's performance is against the law and the company and the CEO could be held accountable. We should also note that the Charlotte paper is not a national paper and releasing material information, such as a statement on profitability, to a selective audience is a violation of SEC Selective Disclosure Laws.
these links show what took place when I first brought up this issue.
#reply-3075195 , #reply-3075439 , #reply-3075500 , #reply-3075556
Next, we see Mr. Mitchell claim that: "getting a company to issue a press release is like pulling teeth. Getting them to list lines of code or dollar amount is rare indeed as I proved here a while back by going through several months of Y2K contracts and finding only a couple with any numbers on them."
While it is true that companies don't like to show how much of the problem they have, it is very inaccurate to say that getting them to list lines of code is rare... or that there is only a couple contract announcements that have any numbers in them.
Believe it or not, there are companies that announce the client's name and the number of lines, and in instances where the client doesn't want their name mentioned, they are referred to by industry or status and then the number of lines are listed.
ALYD could probably very easily not mention the company's name, but instead mention the number of lines of code. For instance they could say that the contract is with a Fortune 50, 100, or 500 company, without mentioning the specific company, and then say how much code was involved. Or they could easily just say what industry the company is in and it's size. For instance, "A large manufacturing company..", and then say how many lines are involved.
However, as you very well know, they DON'T
Instead, we hear all these BIG names thrown out with absolutely no detail.
Then you see the posters on this thread take that name and run with it. They have no clue as to the project size, or if it is just a pilot, but they throw the name around trying to pump the stock higher.
Could it be that ALYD and "slick" Bob realize that the "big" name would give them more PR and if the number of lines were listed or that if the specific name was not mentioned but the number of lines was, then the effect would be much less ? hmmm. makes you wonder...?
The next example of "Gruderspeak" came when ALYD released their initial Q4 numbers.
Here is how the headline read:
Alydaar Software Corporation Announces Preliminary Fourth
Quarter Results: Revenues Increase To $6.5 Million, A 283%
Increase Over Third Quarter Revenues Of $2.3 Million, And
Company Earns Small Profit
upon close inspection of the details in this announcement we see the following:
The Company expects that final audited operating results for the fourth quarter will reflect an operating profit for its domestic operations while Alydaar's European subsidiary, Alydaar International, PLC, will experience a small loss.
Could it be that if you combined the domestic results with the international results there would be no profit to speak of ? Was this release written in a way that is misleading ?
After all, how would it sound if ALYD said they experienced a 283% increase in revenues between Q3 and Q4 of 1997, however that increase still gave them a loss. ?
Probably as bad as saying sales increased more than 29,000% from 1996 to 1997, but that resulted in 55% more loses. That is why you don't hear them, or their biggest tout on this thread, talk about it.
Now what do you get for asking questions like this or bringing up these issues ??
>> It's one thing to state an opinion. It's quite another, IMO, to make what amounts to flippant remarks. A few facts would be nice once in a while. << - Mr. Jeff Mitchell
Well, Dennis you better watch those "flippant remarks" you may actually make a few people think for a change, and as far as facts go... I think it is clear who's side the facts are on. |
