Saturday, April 19, 2008

Weekly recap and upcoming important dates

The stock closed back above the mendoza line this week at $3.04. This is the stock's highest weekly close since Oct. 22, 2007. I am not a technician so not sure if it means anything but it can't be bad :-) This week was relatively "quiet" with only some BOD related news. I'll briefly touch upon this and highlight some key dates that are fast approaching.

BOD nomination- I had already written a summary of my meeting with Director Thomas Toy (see previous post). While I was not surprised about the board's decision, it was a disappointment. Having said that, I do not believe it has impacted in any way the shareholder's/groups resolve to seek better performance and accountability from management/BOD. As I wrote previously, "At the end of the process, it may lead to a rejection by the board and we will need to pursue other alternatives then. Other alternatives would include nominating other more qualified candidate(s), support/withdrawing support for current board members, challenging the disqualification, meeting with management/BOD to discuss other demands/alternatives." I will go over some SEC documents/rulings and discuss this with other shareholders (mostly institutional/close confidants). At this point however, it is probably more prudent to discuss the two independent board members up for re-election. This is clearly another way to show management/board that the current stock price and board oversight regarding all their decisions over the last few years has been unacceptable. Going forward, I truly believe there is significant shareholder value to unlock but the street will always look at the board as the same group that could not navigate a respectable sale or manage the downturn or its assets properly. Even if the shareprice climbs, every strategic decision such as production, outsourcing, R&D, divestitures, markets, etc will need close shareholder scrutiny. While the management/board gets ALL-Star compensation, the performance has been more like the D-league (development league, basketball analogy there). In summary, the group will continue to pursue the support of other institutional shareholders and will always be at the ready to go into a plan B when the proper time comes along. This is what I am most proud of that we have accomplished at the very least.

Bruce Ryan- Tom Toy indicated that Ryan's appointment was also a potential prelude to one of the other board members retirement (thank goodness for that) but nothing is confirmed at this stage.

UT in the news- Since there is not much UT specific news, we have to dig a little deeper this week with PR from sigma designs. Thanks to Salisburygo for finding this. “Moving ahead, we intend to capture an increasing portion of the untapped potential for IPTV deployments around the world,” said Hong Lu, CEO of UT Starcom, Inc. “Towards this goal, we are using industry leading technologies, such as the new generation of SMP8654 media processors from Sigma Designs to create a new line of powerful yet cost-effective set-top boxes.”

Post of the week- This goes to Techbroker, who has consistently updated us on developments in China. Techbroker says, "I am a value investor, this is why I got into this stock. But what I learned from investing UT is that strong management team is more than any value. If you have a strong management, you still have bad time, but company can manage it well. And most importantly, management always think about investors. Vice versa, when you have a bad management team, bad time keeps coming. Because management keeps making bad decisions, and alway put themselve before anything else. If anything goes wrong, they alway find good execuse for it so they seldom learn the real lesson from it. Well, we read this in any investment book. But we will never forget once we have such an experience here in UT." Amen to that....(Hope Peter/Fran and the rest of the gang is reading this :-)

Moving on, there are a lot of upcoming events.

IPTV Webinar, April 28 - I discussed this in a previous post but this is about a week from now. Coupled with all the recent iptv developments, this should be very good. I'm looking to see new contracts and updates on China/worldwide subscribers and deployments.

Q1 2008 earnings, Mid May? - I just talked to a fund manager who grumbled again at the lack of date for the earnings report/cc. The quarter has long ended and we still can't get a definitive date on this but the timing of the iptv webinar should be positive for the bookings/outlook going forward.

One year anniversary of end of strategic study/firing of Wu, End of May - The stock was in the $7+ range when the company dropped the bomb that they ended the strategic study without doing anything and letting go of Wu for internal disagreements. Looking back, this was very bad for the stock as it was open season for the shorts and every reason to think things will get worse before it will get better. When you have lack of financials or even preliminary operating numbers for over half a year, add in the lack of a sale, firing of the China CEO, and you get what happens. A really great job by the board here (sarcasm). Anyway, why do I bring it up? Lets say that the board really believed that the company was undervalued and put itself up for sale (the stock did go up to close to $11 and there were offers for parts of the company), then they have had to open up their books to potential suitors. I often get asked if things are "better" and there is so much value, then why hasn't anybody made a play on it. Well, if you don't get a deal done with the most likely suitors, then those suitors cannot act on it for a certain period of time (maybe a year). Well, that year is up and the stock is sitting at all-time lows still with a lot of issues resolved. Anyway, this is an intersting anniversary date and private equity or other companies may take a second look this time. This will also coincide with Lu's transition to China (yes, its been almost one year already, lets see what he has accomplished).

Shareholder Meeting June 27 and Peter Blackmore assumes CEO position July 1, 2008 - Initially, I had speculated the shaerholder meeting could be pushed back but this may not be a bad date as Peter can give his state of the UT address as he transitions into the CEO role. Q2 2008 would also be done and he should be able to take credit for certain accomplishments and provide a good second half of the year/2009 outlook.

Also, in the next couple of months, divestitures or a share buyback could also be in place. As some have said previously, Good luck to us all :-) BTW, if you haven't sent me an email to join the mailing list, please do so. I have gotten a few these days but I assume some have not "joined" yet. Thanks again for everyone's support! Have a good rest of the weekend.


Anonymous said...

I want join your eailm group, but waht is your email address?

tim_94305 said...