Also in the conference call was a shockingly tone-deaf response to a private investor who asked about share price -- when is it going to go up, essentially. And, among other statements he made in reply, Shah made this either startlingly ignorant or bizarrely denial-of-reality reply, "Since I joined the share price has nothing but improved." Oh, really? Here are Shah's dates regarding his pertinent employment at Cover-All, taken from the company's website:
Manish Shah is President and CEO at Cover-All. Mr. Shah has served as President and member of the Board of Directors since 2008.Previously, Mr. Shah served as CTO of Cover-All since 2004.
Let's take a look at some of the (admittedly cherry-picked to make a point) historical share prices:
Week of Sept 24, 2007: $1.50
Week of Apr 26, 2010: $1.70
Week of Jan. 3, 2011: $1.90
Week of May 30, 2011: $2.70
Week of March 26, 2012: $2.40
Week of July 3, 2012: $1.69
Week of May 27, 2013: $1.48
Current price (9-13-13): $1.28
And in late November 2012, COVR was trading at $1.08 as opposed to $2.40 in March of that year. The stock lost 55% of its value in 8 months, WITHOUT ONE WORD FROM THE COMPANY -- other than that the company doesn't comment on unusual volume of stock movement (earlier in the year there was a huge sell-off.
So ... did anyone at the company point this out to Shah? Or does he still live in a world with lollipop trees and cotton-candy skies?
Initially MS's comment about the stock price having gone up struck me as odd but I then checked the long-term chart on Yahoo and for much of the 2000's COVR was in a trading range that was below $1 so my guess is that what he meant was that the stock price is higher today than it was when he first started working there.
I always like the CC calls by private investors because they often ask questions that an analyst wouldn't dare for fear of straining the relationship that they have with management.
Maybe. But still, he said the price has done " *nothing* but improved." I felt that the question caught him off-guard (been a long time since a private shareholder has asked a question) and that he didn't answer very smoothly. It also sounded - with the 3-year amortization and recognition of revenue etc etc and the presentation of revenue as EBITDA that it could be a LONG time before Cover-All starts showing a profit, so a LONG time before the share price gets anywhere near back to the $2 buck level, let alone $5 - 10. But believe me -- I would LOVE to be proven wrong.