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RealNetworks Inc. Message Board

  • benignindifference28 benignindifference28 Aug 6, 2007 5:23 PM Flag

    The Sell off IMO

    The Sell off IMO



    I am a Real share holder (writing with bag over my head)

    1.Real has failed to create a viable business around Rhapsody. There is no differentiation from its �also ran competitors� (Napster etc) There is no compelling reason to think they will suddenly make Rhapsody into a profit generating machine. They have not dented Apple�s lead and the consumer is telling everyone their preference - iTunes. Even the marketing alliances with the #2 maker of media devices namely SanDisk has not had a significant impact.
    2. Real management has no cohesive strategy. The have acquired disparate businesses which cannot even be said to have synergy (unless your really stretch matters). Where are the pay offs we were promised with cell phone networks
    3. They continue to reward management with more stock options impacting the value of the company. There is no indication this will stop. Eventually shareholders wake up and realize the value being created is in stock options for RNWK senior staff
    4. Mr. Glazer is well known to have spurned any M&A feelers. Stockholders can be certain any past interest in acquisition by anyone, would have been dismissed without consideration or the fiduciary responsibility namely; what is best for the Real network stockholders.
    5. At this point in time the barrier to entering this market is no longer significant. Real core IP, is no longer �singular� there are media players that are available to companies at low cost.
    6. Real had a onetime event namely the Microsoft settlement�. it bought them time and market interest, that time is over and there is no other event of this magnitude in Real Network�s future. They are burning the cash
    7. The various business acquisitions while decent; as stand-alone companies cannot justify the stock price multiplied by the insane number of outstanding shares.
    8. Real has had a stock buyback program in place which is obviated by the irresponsible stock option grant program.
    9. Given the performance of the company (unless it�s the legal staff) why are options being granted?
    10. The CEO-Founder is the major shareholder and will not be replaced. Therefore we can not even look to a change in direction, or motivating dynamics for improvement



    The SP has drifted lower than the actual value of the business (IMHO) and cash on hand, however I think for all the reasons above the market has lost faith.

    b9

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    • well said and god point

      I would not want write a report titled...what RNWK does!!!!!!
      b9

    • What they did versus what they do now are different things. There are new executives who are very talented and will make the earnings grow in the divisions they manage. Gaming is very strong. Ringtones are a terrific addition. The music business made a profit. Where this company is getting clobbered on the stock is the expectation of a loss next quarter. If the company makes a profit next quarter, the stock will do just fine. Three months will pass very quickly. If they miss, this company will be like Sun Microsystems, the stock will remain flat for years and only the company insiders will make money. After all, the cash in hand does not belong to the company. It belongs to the insiders, look at the cushy options package they gave themselves.

      I thought the options were a golden parachute and the company woulc be acquired. I was obviously mistaken. The options were just a method to transfer the cash from the Microsoft settlement to the executives. It was all done legally. So even if this barely profitable company does not do anything in the market place and beats estimates, the insiders will have won and won big.

      The purpose of being an executive for a public company is to increase the shareholder's value on their investment. It is not to enrich oneself at the expense of the shareholders who are afterall the owners of the company. Greed.

      But in all fairness, I like the executives on paper. These are some smart boys and girls. If you want talent, you have to pay for it. I hope this talented group of boys and girls do a great job going forward. I think they should have been rewarded based upon performance, not prior to bringing success and an increse in shareholder value to the company.

      Well, this is my last post. Good luck all of you.

      Cheers,

      Captain Sancho

 
RNWK
7.38-0.07(-0.94%)Jul 11 3:59 PMEDT

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