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Technology Stocks : CATP-The stock is taking off -- Ignore unavailable to you. Want to Upgrade?

To: Dave O. who wrote (552)	3/22/1999 12:01:00 AM
From: Michael Watkins	Respond to of 782

I don't currently hold a position on CATP but have been watching for last 6 months. FWIW: - Employees of Prof. Svcs firms are of several classes a) Partners - they don't leave unless pushed b) Wannabe Partners - almost ditto above. c) Senior people d) Up and comers e) Nine to Fivers f) Newbies - don't typically leave c,d if they have have aspirations might wannabe partners but often rise to the glass ceiling, decide they don't like what's above it, and move on. Many become independents, especially if they carried a business development role of any sort. d,e Technicians in high demand fields often move out after gathering enough background in how-to-be-a-consultant. They are often heavily recruited by sniping head hunters. f - aren't going anywhere, they don't have the experience yet. I make these general comments because it is my opinion that very little of what happens on the stock market, or even financial performance, impacts most of these classes of employees. Many won't be following the market that closely; many will also buy whatever the internal company spin is -- they don't have to worry about the SEC when talking to staff ("Minor burp this quarter in performance, nothing at all to worry about"). Of those that follow and recognize any serious issues, most of those will do nothing. Think about it -- a huge percentage of stock holders hold their stock even after terrible news. That buy and hold thing. A stock holder is a lot more "mobile" than an employee. It takes only conviction and a quick phone call to sell your stock. Leaving a job is another thing (even for high demand folks, it is not always a simple decision or process). If management are crappy, a certain percentage will leave. But don't expect that the whole ship will run, because this "event" isn't going to be what does it. Taking away parking priveledges or charging for coffee is likely to do more. In my experience, some consulting firms attract and retain staff because of the almost-righteousness of the entire operation. Firms that have little moral character end up being revolving doors - always attracting new staff, always churning a percentage of the current bodies. The cost of churn is factored into the business. A more enlightened approach makes it a lot easier for staff to look like a partner or senior person, through a combination of remuneration, respect, responsibility and supporting firm culture. There are very few of those places around, and most of them are not big firms. Consulting firm's assets are people, reputation, stability, alliances, client base. A series of sustained losses might undo one; missed targets probably not. I think the most important thing that has happened is a cementing of the mistrust that the street already had. Darlings to dead beats. They can recover if they want to. Some of those assets might be valuable to others. Just a few thoughts, and I doubt it makes making a buy / hold / sell decision any easier.

To: Dave O. who wrote (552)	3/22/1999 12:06:00 AM
From: John Ritter	Read Replies (2) \| Respond to of 782

There has been discussions about the good employees leaving because of the earnings shortfall and 'tarnished reputation of CATP'. I would like to know if anyone has more information on the re-organization that triggered this shortfall. I noticed in the press release that several clients have bought into the re-org concept, seems to me that this offers employees and opportunity. It used to be, in days of old, that employees put their backs to the wheel when a company was evolving and were in fact rewarded. Sure individuals can bail and go elsewhere, but I have been around to see numerous examples of the grass is greener. In several examples individuals were far worse off for making a change. Take the case of EDS some years back (three or so), they hired a whole bunch to build their consulting group, then bought one and laid off a whole bunch. I knew of a some who left some nice long term positions and found themselves on the street in middle age. Frankly, the reorganization and new contracts are going to be the turning point here, if employees want to leave they always do for whatever reasons, but we seem to be discounting that CATP is a good place to work. And another thing, there are a boatload of analysts following this company, even if they missed numbers are they all fools? There is value here in my view.