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Technology Stocks : IATV-ACTV Digital Convergence Software-HyperTV -- Ignore unavailable to you. Want to Upgrade?

To: Skip Jack who wrote (3730)	5/17/1999 3:36:00 PM
From: art slott	Respond to of 13157

Wahooo!!! Jack! eom

To: Skip Jack who wrote (3730)	5/17/1999 3:42:00 PM
From: Mike Fredericks	Read Replies (1) \| Respond to of 13157

Skip- I can't help but feel that your post is at least partially directed at me. Hence, I feel like I should respond. It amazes me that these guys bash the hell out of the company and for the most part don't have a clue on what is going on. I'd like to think I do have a clue; I'm a PhD student in Computer Science at the University of Maryland (#11 Computer Science program according to US News). My research areas currently cover search engines and improving algorithms to cache (or otherwise improve apparent bandwidth) for multicasted video over the 'net. While not directly related to IATV, I'd like to think that my technical background allows me to understand a little more of the technology than some others on the thread, although I will readily admit to not understanding everything. Several of these jokers have been writing pure nonsense and posting it as fact and then daring people to dispute it. Fact: I'm long the stock. My latest purchase was at 16 3/4 on Friday, and I posted here when the transaction was made. Fact: The compensation plan is 2% of the increase of market capitalization of the stock. Source: The Proxy instructions accompanying the annual report. Fact: According to Netscape's stock quotes service, with a last trade of $17, the market capitalization is $565.7 Million, so there are 33.2 Million shares outstanding. Fact: The company last quarter had approx $401K in revenues and approx $7.8 Million in expenses. Source: Quarterly report on the Business Wire from last Friday. Fact: The company made the following statement in same quarterly report: "Approximately $3.4 million, or over 46 % of the net loss for the 1999 quarter, was the result of a non-cash charge for stock appreciation rights expense, due to a significant increase in the market price of the Company's common stock during the quarter. " Fact: Without that 3.4 Million charge, the loss for the quarter would have been ($0.12) per share instead of ($0.23). To compute this, I took the total dollar value loss, subtracted 3.4 million from it, and divided it by number of shares outstanding. The question is; Is it our responsibility to correct their mistakes, or is it their responsibility to have all the facts before they post wild and false acquisitions about the company. (assume you mean "accusations" not "aquisitions") I have not made any mistakes above. I have cited the sources for all of my facts except the fact that I'm long the stock; that you just have to take my word on. If you check all of my posts on this thread, you will find that I repeatedly mention that I am long the stock and have never ever once said I was or would short. I posted an analysis to this thread in which I made some assumptions, based on the facts above and the assumptions I made, I showed that the executives get rewarded for diluting the stock even if the stock price stays flat, and they get rewarded enough if the stock price goes up that the compensation to the executives exceeds the profit earned by the company. The main assumption that I made in that analysis was that the P/E would be near 100 when the company turned positive. If you choose a smaller P/E, then you need more earnings just to justify the current stock price. I have publicly asked for everyone here to feel free to attack my numbers or assumptions... perhaps I made some implicit assumptions that are false. All I have received from the thread are blanket statements that I am wrong (and only a couple of those, mostly indirect) without anyone directly attacking my assumptions. One poster has offered to point out why he feels I am mistaken, but will not be able to do so until tonight. I would ask that, if you feel I am mistaken, that you do the same. Like I said earlier, I am long the stock. I want to be wrong. I want a compensation plan that fairly rewards the executives of the company without crippling the chances for stock price appreciation. The 10Q will be out shortly and then these same posters will either move on to their next management bashing session and/or pretend it never happened. I have only "bashed" management over 2 things that I can recall. First is the lack of press releases detailing a definitive rollout. Second is this compensation plan. I have certainly criticized the posts of others when I felt that they were reading things into the press release that I felt were not implied (such as the Real Networks announcement of a few weeks back, or several random AT&T announcements, especially the one that mentioned they were using Wink for their interactive advertising). If the 10Q answers my questions and shows me that I'm wrong, great. Like I said, I want to be proven wrong. If the executive compensation plan is not really 2% of the market capitalization increase, or that compensation is given mostly in stock not in cash so it doesn't cripple the bottom line, then fine. All I know is what I read: that the company took a $3.4Million charge last quarter for this plan and that according to the proxy, the payments will be made in a mix of cash and stock, but doesn't specify what the percentages will be. I also publicly admitted my ignorance of accounting principles, so I don't know whether this 3.4Million charge will be offset with a credit if the stock price ever goes down, I don't know exactly what they mean by a 3.4 Million "non-cash" charge, and I don't know whether the executives were actually paid 3.4 Million last quarter or whether the company had to take the charge then due to accounting regulations. I do know that they did take the charge, and without it, the loss would have been a great deal less. Lastly, I will not pretend it never happened. I post here under my real name, with my real e-mail address in plain view. I even posted a URL for one of my personal web pages on the thread a few weeks back when I asked for some help with a search-engine-related research project. All I did was call the company and get clarification on this issue. I have sent my analysis to ACTV Investor Relations at the fax number for the main office that is given on the ACTV homepage in order to get a response from the company. If you have a fax number that would be direct to investor relations, please send it to me and I will gladly fax a copy there. I also posted a copy of my fax to the thread for all to see. -Mike