Bill & All; I havn't lost hope long term, but I do have my short-term doubts. In any event, here are the points I'm making, hopefully in a nutshell:
1. Let me apologize for some misinformation I had previously passed on because I read the wrong line in Vickers Insider Trading Chronology. Steven M. Duffy did, indeed, directly sell shares at $28 a share on the open market (on 2/20), but he sold 500 shares (not 4000 shares). He also indirectly transferred 822 shares at from 28.13 to 28.19 per share. In other words, he helped depress the market price, but without as much impact as I reported. (But, it's not that he wasn't trying: he also indirectly transferred an additional 7,066 shares at an unspecified price on 2/25.) And, in Feb., the other execs didn't exactly have our interests at heart when they transferred, directly and indirectly, another 9,234 shares at from 34.74 to 36.19 per share. That certainly provides a nice cap for the short-sellers!
2. I already addressed the decline in outstanding and uncovered short sales in message #1192 to which I refer you all. Briefly, I speculated that the bulk of the short sales were probably made by Intel, Tektronix and/or other insiders to lock in profit on either shares or options they own that were acquired at $8.08 per share. The decline in short interests was caused by Intel and Tektronix unloading shares so they have less stock to protect. In any event, the decline in short interests is nothing to get excited about with insiders still owning over 42% of the outstanding RSYS stock, all acquired at bargain prices. That not only dilutes the value of our shares, but threatens the stability of the future market value of our shares.
3. As to the forthrightness of Brian Turner. (Sigh!) You have two choices: (a) he's either foolish, or (b) he knows exactly what he's doing, but what he's doing aint to help us.
The (a) choice: A couple of weeks ago, RSYS stock isn't exactly knocking our socks off, but it's hanging in there at about $37. Then comes the ill-fated Red Chip conference. At that conference, Turner suggest that RSYS might be affected by the SEA situation and its profits might flatten as a result, the embedded market is ONLY growing at about 15% (tops) a year, less than 50% of the embedded solutions are Intel solutions and RSYS has no idea how much of that market it has (therefore, can have no idea of the market it will have in the future), etc., etc., etc. Any problem figuring out why the stock thereafter sank like a rock?
The (b) choice. Turner knew exactly what he was doing in (a), above, and meant to make RSYS fall, at least short term. That's because we, as shareholders, just recently authorized the corporation to issue stock to cover a million-and-a-half dollars of incentive stock options for execs. For tax purposes, the when-issued option price has to be equal to the fair market value price of the stock. Obviously, if you're about to grant those options, you want the price of those options to be as low as you can get them to increase the possible future profit taxable as capital gain. (That's why all that exec-owned stock was unloaded in Feb.)
Any questions, my darlings?
4. Zacks, the Comsumer Reports of corporate raters, has RSYS as a 4 (out of a low of 5) short term, and a "sell" long term. Why? Because as long as Intel and Tektronix have all that $8.08 stock to unload (and, RSYS makes them unload it on the open market by not redeeming it or providing for private buyers), the stock isn't going anywhere. The very ownership of those shares acquired so cheaply means the stock value (whatever the company's prospects are) is diluted by both the potential drag on the market represented by the future sales of those shares, and by the continued small float and resultant volatility presently created by those shares being off the market. ( In other words, a lose\lose situation.)
Bill (and anyboby else who's close to RSYS), why not forward this mash message to Turner (or, the head of RSYS investor relations, Jennifer Anderson--who, by the way, seems to be a nice lady) and offer him a chance to respond. If he sends me a response (BurtJD@msn.com), I'll be happy to post it.
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