From Agora--Ronran on the SHM
Thoughts on SH meeting
Posted by: ronran on October 23, 2007 11:04PM
I read most of the posts about the meeting, which I found quite accurate. It was a pleasure meeting all who were there, especially Deb/Dave, Craig, and several others (you know who you are).
Without recapping what has already been said, I felt that Mr. Turley opened the meeting with a rather glib tone that didn't show a great deal of tact. Ptsczza's brother, Steve, nailed him squarely between the eyes in a respectful, yet firm manner that I thought was very appropriate. Things got a bit more serious thereafter.
Turley's opening presentation was mainly a recap of what we already knew. However, he did make the comment that "up and to the right" was a reference to the cash we have in the bank, i.e., and I took this to mean that he had never intended such to refer to the share price. I was a bit confused by that, but it is what it is.
Several comments were made about "getting the word out", with Turley indicating that this is a prime goal although it is "just starting" to be effective. The new report from Cohen was mentioned, in terms of the "massive research" that went into it, and all of this was talked about in the same breath as acquisitions. In view of this, I asked a rather pointed question, which was to the effect of why we continue to use the same techniques and strategies that have obviously unsuccessful in raising our stock price, and how we should expect the CEO of any company that we might want to acquire to be interested in taking our stock as partial payment in view of the fact that the price has dropped some 60% since the last shareholder meeting --- the response was that "We aren't just meeting with current shareholders", or something to that effect. Yawn.
As to the share price, Turley stated that he "doesn't know how to fix it". With apologies and respect to those of you who disagree, I most certainly do feel that the company has an obligation to at least be concerned enough to be proactive in this area. As I stated to Turley at the meeting, no one should expect him to be able to control the price on a daily or weekly basis --- however, when a downward trend is in place for more than 15 months despite growing cash reserves (remember, "up and to the right"), something is wrong. And again, if we expect any other companies to be interested in taking our stock as partial payment in any acquisition or merger, it is something that must be dealt with. Although I didn't say it at the meeting, the only CEOs I have ever heard make the comment that, "Well, we are running the company as best we can, and the stock price will take care of itself" are those with plummeting or stagnant stock prices. I don't recall ever hearing a CEO whose company stock price has skyrocketed not make a comment about how proud he was to be able to increase shareholder value --- which is what companies implicitly promise when they invite people to invest.
Eric Swartz, as some have already indicated, summarized our current position very well and succintly by stating that the BoD really has no option at this point but to await the outcome of the litigation. To be candid, that did rub me the wrong way a bit, coming from someone who sold 250 million or so shares back to us retail shareholders while announcing being "long" on the stock during that same time period. Still, he hit the nail on the head, and I appreciated his candor.
Getting back to acquisitions, Turley stated that there is a "short list" of candidates and a time frame in mind, but that no promises can be made. Again, however, it was clear that this was unlikely until the litigation is resolved.
In general, I thought the meeting was good, and that there was a good balance between "tough" questions and "softballs". I was sitting with Brian, and I felt his opening remarks during the Q/A session were directly on point and well received --- believe me, he continues to take the BoD to task, yet in a fair and respectful manner, which I strongly favor.
I will not be returning here to the board, but since I had announced that I would be at the meeting, I felt I should share my thoughts. Best wishes to all.
