Saturday, June 21, 2008

Weekly recap - New 52 wk high

The stock closed the week at $5.87, up 41 cents or 7.5% for the week. The weekly performance included establishing a new 52 week high of $5.94 on Thursday and coming during a week where the S&P, Nasdaq, and DOW lost 3.1, 2, and 3.8 percent respectively this week. The stock is now up 113% for the year and 163% from the 52 wk low established just last March. With the upcoming shareholder meeting next week, month-end closing (window dressing), and potential market bounce, UT is set to break $6 and continue upwards.

News/highlights from the week include the following.

Sri Lanka Telecom IPTV contract - This was one of the four (out of five) iptv contracts won by UT in the India region. "SLT's IPTV deployment is designed to support approximately 100,000 subscribers in the next two years and will enable the company to provide video services to future subscribers over copper lines in the next three to four years." In terms of other potential iptv wins, there has not been a formal announcement for Hong Kong. The activities in Russia, Eastern Europe, Middle East, and South America for iptv/broadband/ngn should keep the pipeline of potential wins in iptv growing.

Wi-Lan lawsuit targets Rim, Motorola, and UTStarcom - "Wi-Lan said it has started litigation in the U.S. District Court for the Eastern District of Texas, Marshall Division, alleging that the companies' mobile devices and other equipment infringe Wi-Lan patents. It did not specify what damages or remedies it will seek under the legal action." These kinds of lawsuits are more of a problem because Wi-Lan is just a patent shop and doesn't build anything (hard to counter sue them if they are not making anything). "Formerly a money-losing wireless equipment maker, Wi-Lan switched gears in 2006 to build a storehouse of patents through acquisition." I guess if all things fail for UT, it can also start suing other tech companies for patent infringement (like Starent).

India iptv developments/updates - The post(s) of the week go to canada3396 who posted about Aksh and its work with MTNL and now BSNL in providing iptv services. The uptake in iptv subscribers in India is still slow (as expected) but there was an interesting news item showing UT controller/STB that can be used with cable systems. (you can see the UT logo in the figure :-)

Schaeffer's Investment Report - As UT stock makes news highs for the year, other investors/traders start to take note of the company. Overall, the company is still a tightly held secret or even something most people would not even consider (considering its history of destroying shareholders). When the stock gets into the teens or higher, then it will be a must own, analysts will jump on the bandwagon, and indeces will add it (funds will then have to get in). That of course is still a long ways away but the potential is definitely there and its nice to dream about much higher prices.

Technology talk - For those technology buffs, Tigre and Shadow have their consistent inputs. Tigre discusses investments in China's home grown TD-SCDMA. Some companies are working towards 4G already. Shadow discusses some new technologies... Shadow also corrected me about UT selling its wimax division. I had speculated last Monday that this has been sold as part of the MSBU but during the Analyst day meeting next morning, it seems that it was not part of the deal for divestitures.

Proxies - I hope everyone has had a chance to send in their proxies. If not, you can also do it on line. The shareholder group's suggestion would be to withhold votes to the directors but agree with the employee stock option exchange program. Now, that the stock is climbing, it is interesting to note if holders of options with $6-10 strike prices choose to reduce the number of options to get a slightly better strike price. In some weird way, it would be better if the stock had stayed under $5 and all the options exchanged (that would be better for current shareholders-less dilution in the future).

Postings this week - There has been a pickup of postings on the yahoo board due to the new highs and the outperformance. My suggestion is to take a break from posting or overthinking the situation. The stock/company is clearly in turnaround mode, it clearly has value (safest stock at $3.75 :-) and now the stock technicals are very good. Keep up the postings with good content but there really isn't much value saying the stock is outperforming 10x or the shorts are going to boost the stock to $100. Lets have some class and keep the garbage out of the message boards so that its easier to find the good information.

I am going to have my root canal permanently filled (and capped) later today but it should be much easier than the impacted teeth extraction I had last week. Have a good weekend to everyone. By the way, some of the shareholders going to next week's shareholder meeting will meet earlier (for lunch), let me know if you are interested in joining us. I hope there will be more than 11 shareholders for this year's shareholder meeting.

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