CH,
I posted an open letter to Eddie Blinker on Yahoo's FIBR thread this evening/morning, responding to some of his concerns:
"Dear Mr. Blinker,
I am glad that Osicom has a shareholder who is as committed to the company as you are. I wish there was a way that I could win your support.
Please allow me to address your concerns, and those of a few others who have posted here. Regarding short-selling, I understand that you are of German citizenship, and that short-selling is illegal in your country. In the United States, it is looked-upon as a tool for obtaining a more-balanced market. I consider myself a value-investor, and lately find it very hard to locate value stocks. At present, I have only identified two stocks that I believe to be significantly undervalued; Osicom is one of them! Because I feel that the market as a whole is very overpriced, I became interested in the practice of short-selling, as a way to make money when an overvalued stock corrects. That explains my interest in "Roger's 1998 Short Picks" thread on Silicon Investor. [I also hold a position as interim Chief Technical Officer with Roger's start-up company, Babb Enterprises, and follow the thread as a way of strengthening my relationship with several of the firm's participants.]
As a value investor, I have only been "long" Osicom, and have certainly never short-sold the stock. Furthermore, when I do short-sell a stock that I consider to be insanely overvalued, I do not adopt the tactics of Craig Crawford, who as you know, has vociferously bad-mouthed Osicom on many threads. [Indeed, even when I own a long position in a stock, I am careful not to hype it, for if my analysis proves to be wrong (as it sometimes does, in spectacular fashion), I wouldn't want to feel that I have led others astray.]
I generally don't think hype is healthy, whether it is expressed by longs or by shorts. It is impossible to quantify whether Osicom's run-up to 6, pre-earnings, was due to investments by large corporate investors, or due to purchases by hundreds of small-investors, who follow and are influenced by these message boards. Likewise, it is impossible to know whether any people have been negatively influenced by Craig Crawford's actions, though that is clearly his intent by his very frequent posts. My post that I would give him a "free speech" award was an attempt at humor, sort of like the proverbial politician promising voters "a chicken in every pot." However, I do think that Barbara Payne has made a valid point, by saying that Osicom should expend more effort to silence Mr. Crawford by producing results, rather than through legal intimidation.
Regarding Par Chadha's leadership, I should stress that I don't know the man, and obviously can't have anything against him personally. Certainly, if not for Mr. Chadha's efforts, Osicom wouldn't have the ISO-9001 manufacturing facility in China, nor the three products upon which we have all placed so much hope for the future: the IQX-200, the GigaMux, and the Net+ARM. However, a company's success is ultimately measured in two very different ways: by the company's sales, earnings, and strength of its balance sheet; and by the performance of the company's stock.
Despite quarter-after-quarter of hype that these products would win broad acceptance and bring riches to the company, we see that has not happened. It has not happened in terms of the company's sales, which have been flat, nor in terms of earnings, which have often been negative, nor in terms of the balance sheet, which shows a weak cash position. It also has not happened in terms of the value of the company stock, which has steadily dropped during one of the greatest bull markets the world has seen! It is incredible that Osicom, with these three very-high-margin products, is trading at a price/sales ratio of 0.4.
I thus suggest that while Mr. Chadha has done an acceptable job at developing/purchasing the China facility, the IQX-200, the GigaMux, and the Net+ARM, he has not been able to follow through. To use a boxing analogy, when you have your competitor on the ropes (especially when he's a larger, more powerful opponent), you must follow through aggressively. You must not allow him to regain his composure, and to turn the attack against you. The GigaMux is the first local DWDM to market. We MUST not fail to succeed with this product! To allow Cisco to catch up, and then crush us with their massive resources, is not an acceptable option.
I do not know why Mr. Chadha has been unable to deliver the knock-out blow. Perhaps it is due to factors that are not even his fault: he was certainly damaged by the allegations of the Barron's article, and it's possible that he was entirely innocent of all such charges. I would NOT let Dow Jones (the publisher of Barron's) off-the-hook as easily as I might ignore Craig Crawford. With a team of editors supposedly trained in journalistic standards, and a team of attorneys to review articles before-hand, there is no excuse for their publication of that garbage.
My post suggesting that I replace Mr. Chadha was also, to some extent, tongue-in-cheek. Yet, whether his shortcoming are due to an internal flaw, or due strictly to unfair damage from Barron's or other quarters, I am serious in believing that this company would do better with a new leader.
I would certainly be thrilled to serve the company in any productive role.
Respectfully yours,
Charles S. Stein"
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I'm not sure whether my suggested initiative would have a chance, or if it would only be a waste of postage. I also can't promise that I'd be the best man for the job, but I feel that I couldn't do much worse than whom we have at present. I would be honored by the opportunity to serve you and the other shareholders, and would endeavor to turn Osicom into a networking blockbuster. |
