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Westell Technologies, Inc. Message Board

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  • koberjm1122 koberjm1122 Sep 8, 2000 9:51 AM Flag

    CAPTAINSMARTJACK

    After reading your last post, I have to wonder
    what was the point of mentioning the potential revenue
    shortfall in the first place? I guess myself, along with
    many other investors (probably less sophisticated than
    yourself, but nonetheless shareholders of westell) assumed
    that your post meant that Westell's EARNINGS would not
    be met, an event which is NEVER priced in the stock,
    irregardless of the huge hit it has taken over the last few
    months.

    This created alot of fear and uncertanty
    among shareholders and probably affected the share
    price somewhat (although I am not certain how much
    influence these boards have on stock's' share price but I
    do think it is some).

    The fact that renevues
    would or could be somewhat lower while earning
    projections remain unchanged is really not a news story to
    me. Hate to say it, but I think we all would have
    been better off if you would not have mentioned it in
    the first place...........

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    • koberjm,

      It was mentioned to get this
      board off the clouds, and back to reality. Before my
      post, 70% of the people on this board were screaming
      about the BLOW-OUT quarter. How the revenue estimates
      were 120 to 130 Million, and how that would be blown
      away. How there was no inventory build-up, and that a
      inventory problem would have no effect on the earnings. How
      any analyst, or reporter, that talked about the
      inventory build-up did not know what he was talking
      about.

      So, I wanted this board to realize and understand
      that there REALLY was a inventory build-up. And, that
      this build-up DID cause orders to slow down in the
      first part of the quarter. I wanted the board to expect
      a potential shortfall of the revenue numbers, not a
      blow-out. Look at how many stocks drop by 20% when they met
      earnings numbers, but not the "whisper" numbers. Where do
      these whisper numbers come from?? They come out by the
      feeling of how close the actual numbers will come in. If
      everyone is expecting blow-out numbers, those whisper
      numbers will be high. I wanted everyone to know, and
      expect what realistic numbers would be. I also wanted to
      let people know that if revenue was not met, to not
      worry. There was nothing to worry about because this was
      a one time small bump, and Dec would show
      that.

      When I first posted a shortfall, this board would not
      accept that. The analysts and reporters were not the
      ONLY idiots, I was too. But, after people calmed down,
      and thought about all the discussion, the mood of
      this board changed a lot. Just a week later most
      people were not concerned about this quarter. They would
      all be happy if revenue was met, and would not be
      concerned if there was a shortfall. Many posters changed
      there stance saying they would not be upset with a
      shortfall this quarter. The mood of investors would have
      been much different on earnings day if none of this
      was talked about.

      In my first post, I only
      mentioned REVENUE shortfall, and not earnings. At that
      time, I was not sure if earnings would be met either,
      but I was sure there would be a revenue problem. I
      decided to wait and see how the quarter progressed for
      the next few weeks before talking about earnings. I
      agree that meeting EARNINGS, and showing GPM growth is
      more important than the revenue numbers. But, there
      are people that put a lot of weight on revenue
      numbers. I let people know that I would keep watching this
      situation, and update later. Now, even though there COULD
      still be a warning, I am saying I don't "think" there
      will. There could be, because I believe the revenue
      numbers will still fall a little short. But, the earnings
      will make up for that, and negate the need for a
      warning. As long as everyone understands this, the board
      can be more relaxed, and focus on the long
      term.

      I'm sorry if I worried people a few weeks ago. I
      tried to explain many times not to worry. And, that if
      there was a shortfall, it would not be a bad sign.
      Maybe you did not get that impression, but the point
      WAS made. I try to supply acurate DATA points for
      people to use when deciding how to invest in this
      company. Those data points may make some people feel
      better, and some feel worse. No matter how it affects
      you, it is a data point to be considered.

      If
      you don't want to know about any information I have,
      place me on ignore.

      • 4 Replies to capt_smartjack
      • Captn, I support totally what you are saying...
        and I like what you said at the bottom about data
        points. How the data points affect people is
        inconsequential, if its a true data point than its a true data
        point, and the rest is just emotions or how people
        perceive data based on their position (long or
        short)

        Second, the last posting about revenue growth is also
        important. Everyone knows my position by now, but the only
        thing I heard last Q, was about the great revenue
        growth [finally]

        If as you "guess" Westell comes
        in at $110M rev
        or lets say $120M rev, to me that
        would be a short term dissapointment. The poster before
        me is right, Juniper, Ariba, any New Economy stock
        is judged on revenue growth, especially SEQUENTIAL
        revenue growth.

        Example, last quarter Ariba had
        some amazing number like 95% sequential revenue
        growth... poor little Commerce One came in at "only 75%"
        (estimating) and the stock got hammered because it didn't
        "match" Ariba. The point being even 75% sequential is
        relatively unheard of and extraordinary.

        So with a
        $110 or $120M quarter upcoming your still only talking

        $110M over $108M = 2% sequential growth
        $120M over
        $108M = 11% sequential growth

        I would say either
        number would be seen as dissapointing and I think this
        is what is being shown in the stock price right now.
        Unfortunately orders in this business are "clumpy" so the
        strength of last Q, is going to hurt this upcoming Q in
        terms of comparables. People are not investing in
        "momentum New Economy" stocks for 2 to 11% sequential
        revenue growth.

        Granted, and I truly believe,
        Westell will show a good December quarter because I think
        finally SBC will get their act together, but this is
        implying everyone does their homework and looks deeper
        into the story. For many, theu will look at the 2 or
        11% sequential growth and go "uh oh". Obviously for
        those who dig deeper, they will see it as a 1 time
        occurance, but for many it will be a trouble point.

        I
        also agree with your point about whisper numbers and
        the mood on the board. Everyone WAS dissing all the
        analysts as whacko and how could they question Westell and
        if NOTHING was said I think people were expecting a
        $140M+ quarter and who knows on the EPS.. .15 or
        .16

        I have seen these EPS guessing "contents" on
        countless Yahoo boards and people are so way overoptimisitc
        on the stocks they own. If consensus estimate is .10
        and you run an EPS "contest" you will see countless
        .16, .17, .18, and then the company comes in at .14
        and people are "dissapointed". It is an amazing
        dynamic. I think Westell specific the board has been tamed
        in expectations, but the board is not all Westell
        investors so it should be interesting if they come in .01
        over EPS but with 7% sequential revenue growth how the
        STreet will react...

        From that point the question
        will be, will Westell be punished for the "past" or
        start running up in anticipation of the
        "future".

        P.S. Before *I* brought it up, I didnt see 1 mention
        of Gross Margins on this board after reviewing 4
        weeks of "data points", but now I think its in the
        general awareness of the Westell community of its
        somewhat "importance" as I see a lot more posts about
        it.

        Once again, another data point.. some decided to bash
        me on it, others said.. hell, it might be a halfway
        important consideration. Facts are facts, everyone
        interprets them differently.

        Keep up the good
        posts
        Mark

      • Capt:

        I do appreaciate your information
        and your knowledge of the company and its products,
        future plans, ect., Thank you for clarifying why you
        felt that you needed to discuss what you did. I would
        never put you on ignore, as I have gained more
        knowledge from you about the company, it's products, it's
        potential strenghts and weaknesses, ect., than anyone else
        on this board. I was just wondering why you felt it
        was neccessary to issue a warning about revenue when
        earning would remain unaffected. It is clear that the
        potential impact of a revenue shortfall in relation to
        earnings was unclear at the time of your post. Your
        motivation for writing these posts (to ultimately calm
        fears) makes much more sense to me now. Thanks for the
        good posts (both good and bad). I do appreacite your
        efforts.

      • THANK YOU CAP'T FOR YOUR INPUT. I feel better. Looking forward to Dec. Keep us posted.

      • Captain

        Your thoughts, wheather positive
        or negative, are greatly appreciated. You are one of
        the few posters on this board who is able to
        articulate in a professional manner. I would hope others
        readers of this thread can at least see that you do not
        post SPAM or meanspirited misrepresentation of facts.
        You call em as you see em. Keep up the good
        work.

        Regards,

        dylankai

 
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