Quite interesting! To make sure they stay available, here they are pasted, instead of links (They are easier to read on Yahoo, however, because of the line splits):
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ProfSkeptic
by: MYPAIR
21711 of 21745
Per your request, the following is "The World (PairGain) According to MYPAIR". It will be posted in rather
general terms; and, is only my perception based on my tenure at PAIR. This story will also include my
perception of Chuck and our main competition.
At the time I interviewed for my position at PAIR, the company was very small ... less than two hundred
employees, and had recently gone public (IPOed). I was personally interviewed by Chuck over lunch.
Needless to say I was very impressed with him and his sense for looking out, not only for the best interest of
the Company, but for its Associates and Stockholders as well. He absolutely sold me on the Company, its
technology and potential. At that time the stock price was in the $6.00/share range.
We all worked extremely hard, with a lot of over time in attempts to get the product and word out to the
Customers. The word that HDSL is a viable solution for their needs. The Customers (RBOCs) were
extremely entrenched in the "Fiber Optics mantality" at that time, thinking it was the best solution for their
needs, and would support the Government's directive that they support Phone Customer demand or pay
fines for failure to do so.
Chuck and our President (at that time) were on the road taking the HDSL story to the RBOCs. They
worked long and hard to shatter the "Fiber as the only solution" perceptions, and were ultimately successful
when PAIR proved the technology worked. Orders started coming in and the stock price started to take off.
From there, PAIR started growing tremendously. We couldn't hire fast enough, and quickly outgrew our
campus in Cerritos, CA.
We signed a new lease on a building in Tustin, where we figured we would be able to grow into it over a five
(5) year period. In fact, by the time we actually moved to the new building several months later, we had
outgrown it and had to rent another building. We've rented several more since then.
Not long after moving, stock was at its all time high of approximately $169.00/share presplits (or about
$42.00/share post splits). Needless to say everybody was elated, and everybody including the stockholders
loved our "fearless leader" (Chuck). Chuck has always been rather conservative relative to his dealings with
the Analysts, stockholders and Associates. His thoughts behind that related to the fact that if you convey an
overly optimistic view of the company's direction, the analysts could take that into account when predicting
future expectations (very prudent, in my mind). He always said "this rocket ride is not going to last forever".
He really seemed to know the industry and the fact that HDSL was going to become a commodity. Not long
after that, PAIR learned that our Investment firm (Goldinger) had gone against PAIR's board of directors
edict as to how our money should be invested. By the way, Charlie McBrayer wasn't even working at PAIR
yet. As soon as we were made aware of the "fraud" the SEC was notified. If you look into this situation,
you'll see that nobody ever placed a lawsuit against PAIR or Sr. Management as a result of the investment
"fraud" ... because of how Chuck handled the whole situation and the street's expectations at that time. That
right there should speak reems about how the issue was handled. (More on next message posted ...).
Posted: 05/20/99, 5:12PM EDT as a reply to: Msg 21641 by ProfSkeptic
ProfSkeptic
by: MYPAIR
21712 of 21746
(Continuation from prior post...).
As I was eluding to earlier, HDSL in fact did become a commodity as Chuck had predicted. Several years
ago, ADTN decided (in their infinite wisdom) that they would make a run at PAIR's HDSL market share
(between 70-80% at that time). I think their mantality was that if they cut pricing in half, they would
quadruple their volumes sold. The pricing war commenced! One thing ADTN didn't seemingly take into
account was that we had our act together and were continuously reducing costs wherever possible. The
price war continued and over a two (2) year period, PAIR reduced our HDSL pricing to the Customer base
by over 70%.
As a result of the major price reductions, and ADTN continuing to compete in the price war, both
companies' stock prices took major hits. Some people out there ("Pictureboy" for instance) don't seem to
understand that we are still shipping greater volumes quarter-over-quarter and year-over-year than we ever
have ... as evidenced by the fact that even though we have reduced our pricing by over 70% during the past
two (2) years, revenues have remained relatively flat (do the math). Oh by the way, this may be an
opportune time to note that ADTN has yet to deliver units to the Customer at a lower price than PAIR.
Time will tell if they can do it for a sustained period, and to the Customers' satisfaction.
As a result of the price war, it seems everybody wants to use Chuck as the scapegoat. If anything, he should
be praised for "seeing the writing on the wall" and ensuring that we as a Company strategically plan for the
day "the Barbarians (competition) are at the gate". If we hadn't done so, PAIR would not be here today.
Lately, everybody seems to think PAIR is a loser company because of losing market share in HDSL. Guess
what people ... we're looking ahead to new technologies and products (HDSL2, PG-Flex, PG-Plus,
AVIDIA, etc.). I know ADTN also has HDSL2, but I feel confident that ours will be the best out there, just
like our HDSL products. And, just like our AVIDIA system will be. People also seem to think that all the
alliances have been formed relative to ADSL. I think you're going to see tremendous demand for our
AVIDIA system because it's absolutely the best ADSL product available. It's in trials at many potential
Customer sites, and they love it so far. And, I think we'll start seeing tremendous demand start rolling in
towards the end of the year.
By the way, getting back to Chuck. He was instrumental in getting Mike Pasco on board, because he and
the rest of the Board were aware that they needed a new leader to take this Company to "the next level".
He's not even involved in the day-to-day operations any longer. Mr. Pasco is reorganizing Sales and
Marketing ... as many of you out there say we need at this point. I think everybody out there are going to be
very happy with "the new PAIR" soon. Just give Mike a chance to do his thing. And as for Chuck, I think
many of you not only owe him an apology, but respect for what he has done for this company and his
forsight to know when change is needed!
That's "The World (PairGain) according to MYPAIR".
Good luck to all ... and, happy investing!!!
Posted: 05/20/99, 5:14PM EDT as a reply to: Msg 21711 by MYPAIR |
