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Technology Stocks : IFMX - Investment Discussion -- Ignore unavailable to you. Want to Upgrade?

To: puborectalis who wrote (10745)	5/9/1998 1:16:00 PM
From: Robert Graham	Read Replies (3) \| Respond to of 14631

I have been giving the market sentiment aspect of my thoughts more attention lately. Here we have a company that out of the blue disappointed in a big way and called into question its track record that it had developed over a period of a few years. The aggressive handling of the restatement process by Bob F did not help here at all. This gave the market all the "proof" they needed to disqualify Informix with bias. The stock holder who remained on board and others who bought into this picture looking at Informix as a turnaround candidate would only do this after such a disappointment only if they has very high expectations of this company. Like I mentioned in a previous post, the aggressive restatement by Bob F has two sides to it. On one hand, his reworking of the books made it possible to provide himself with some operating room in his efforts to turn around the company by being able to report an early profit. I do not find fault with him here, for in a turnaround effort there is allot working against a success including time, so why not have time work to your better advantage. However, his aggressive downgrading of past revenue and profits along with the initial profit it allowed him to report set the stage for shareholders that have very high expectations. The high expectations of the shareholder apparently were not met with this last quarter's earnings report. I think Bob F has underestimated the negative impact of his very aggressive reworking of the books which has been one of my primary concerns all along. So the uptrend of the stock since January's earnings report is now being met with a selloff. Market sentiment is now changing for this stock and becoming more negative. This leads me to believe if Bob F does not deliver more substance by the end of this quarter, this stock is not going anywhere for the longer term. Let me consider Bob F himself. From what I see so far, he is methodical and conservative in his approach. What is interesting is that this individual aggressively pursues the conservative goals that he sets up for himself. As a side note, I will admit here his handling of the SEC delisting of IFMX required a very intense approach which he came through on. Aside from this success, I do think his goals have been conservative by their nature. For example, instead of expanding the sales and marketing staff in anticipation of more business, he has reduced staff and substantially cut costs which is a much more conservative posture. This is a more survival oriented approach to the business. This in itself may have been a prudent move. However, when the focus is on this aspect of the business, it is less likely that this business will be reporting impressive results from their sales and marketing efforts, which is an outcome of a more aggressive stance. Actually, his efforts that resulted in a substantial cutting of costs can work against his turnaround efforts. From what I gather, in the conference call, the company's efforts to gear up for increased sales and marketing efforts, which is an adoption of a more agressive and costly posture in the market, will come in the future. So in hindsight it is no surprise that shareholders were disappointed with last quarter's performance results of this company. I suspect Bob F is seeing this turnaround as a longer term process, while the market is seeing it as a one to two term effort to show results. This is also inline with the speculative nature of today's market that looks for "instant" results. So in foresight I see it unlikely that Bob F will produce the high degree of results the market is expecting from this company. At best, he may attract some long term money. But this will be difficult in a market prepped for short term results which the market up until recently has been delivering on. Meanwhile, Bob F will have his attention focused more on the customer than the shareholder of his company's stock. Any comments? Bob Graham