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Technology Stocks : Identix (IDNX) -- Ignore unavailable to you. Want to Upgrade?

To: brad greene who wrote (13080)	4/18/1999 1:31:00 PM
From: brad greene	Respond to of 26039

Brad, Wow...what an interesting and thought provoking post! I could not agree more..... that going big into Bio-ID now would finally get IDX stock moving and shaking.....not to mention Bill Gates loading the boat! I'm sending in my dues check today! Baloooga

To: brad greene who wrote (13080)	4/18/1999 6:58:00 PM
From: David	Read Replies (1) \| Respond to of 26039

Thoughts on an IDX restructuring . . . First, let's have them digest IDT. The deal isn't even officially done. I agree with your main point -- that IDX will have to remake itself into a pure bio-ID company -- but don't agree on the "when" and "how." When? It is not the right time to sell off ANADAC and/or the live scan division, since the money that is realized upon the sale will not result in a higher cash flow. Think of this analogy: IDX has a reliable "job" (ANADAC/live-scan) that pays the bills and allows for some discretionary spending money (i.e., F5 research) and occasional credit purchases such as Fingerscan and Identicator. IDX has a number of dependents (shareholders and employees) relying on the cash flow from its reliable job. If you were in that situation yourself, you should never quit your day job to look for work without having something better already lined up. Believe me, switching from ANADAC and live scan and replacing them with facial recognition and eye scanners is not a very smart move. (Besides, you may have noticed that IDT has a certain amount of facial recognition R&D going on, so that may already have been acquired.) While it is true that other biometrics will have niche markets not available to fingerscans, it's also true that these markets are (1) much smaller and (2) not here yet. If you are interested in increasing the reliability of a biometric identification, I think the math favors a two-finger test over a finger/other biometric combination. (Sorry, NRID.) There are better investments out there for the eventual sale of ANADAC and live-scan (or the eventual secondary offering). And it depends on what business model you believe will be best for bio-ID. If you see the future as selling lots of IDT scanners, you may need money to make them first, so you do a secondary or sell off a division -- but you better have the OEMs in place. If you see biometric system licensing down the road, buy up a VPN company, combine it with your hardware and core technology, and lease intranet security seats for $100 or $200 per year. That could be very lucrative. And the best for last: The Gillette strategy. Subsidize or give away your scanners to get them everywhere, and then sell each subsequent use. Verisign or Novell can keep score of every time the biometric protection is invoked, and credit card companies or one of the network providers bills the users. That would be very cash-intensive up front, and the best of all possible worlds for IDX shareholders. Hard to figure an IDX market cap for that world, but it would be at least in the tens of billions. I don't see any of those futures this year, so I would not want to see any cash cows sold . . . yet. When the time is right, yes.