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ORBCOMM, Inc. Message Board

  • friendofthetrend friendofthetrend May 21, 2013 2:38 PM Flag

    Profit from This Stock's 'Bad Day'

    Google that title.

    "there are some interesting new company developments to contemplate. One is a new-generation satellite on which ORBC is working, which will lead to dramatic increases in speed and capacity.

    Another is the stretching of ORBC's business model from an emphasis on the network to the company becoming more of an end-to-end provider"

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • the problem with being an end-to-end provider is that they will lose business from companies they serve that they are now competing with. IDSY is one. Their contract ends at year end. ORBC is now in direct competition. IDSY will switch to Iridium which is the same supplier as IDSY's main competitor. IDSY has over 100K trucks under contract. Big loss for ORBC.

      The other problem is that ORBC has such a small percentage of the M2M business segment as an end-to-end supplier. So either ORBC buys into that area in a much bigger way, or they will always be an afterthought.

      • 1 Reply to dbtunr
      • If Henry Ford listened to customers they would have told him they wanted faster horses.
        If ORBCOMM listens to IDSY they'll be the old ORBCOMM, doing things the old way.

        It may not be that easy for IDYS to switch to Iridium. It would be hard for me, for one, to quantify that risk. Even if I could I would need to weigh it against benefits and tradoff. Things like value given for value received.

        CC transcript mentions "$5 million to $7 million through revenues on an annual run rate and we are working hard on project that will contribute far more.That's just the last two acquisitions.

        Some of the acquired companies were hampered, as channel partners for ORBCOMM , due to scale. So that's addressed by the merger.The $5 to $7M is higher margin. There are many other benefits to try to quantify and weigh. If the integration is successful you don't just have a faster horse but a new company with improved metrics and improved ability to provide shareholder value.

        The horse IS going to be faster. The one in the race now is tired old and old . OG2, will change everything, imo.

        Would ORBCOMM be better off static? Henry Ford would say give then any color they want as long as it's black.

        ***

        Barrons 3-2013

        "the study found that companies that focused on and made acquisitions achieved the highest shareholder returns, outperformed companies that solely focused on organic growth,
        created more value for shareholders and grew market share more quickly than their
        competitors.

        ..acquisitions have enabled the companies to stay ahead of the curve and the competition. But that success hinges on adept management of those deals and the subsequent integrations, something many companies struggle with."

 
ORBC
5.95Mar 3 4:00 PMEST

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