Well, you "Strong buy" guys seem to get sucked into the Wolfy vortex, and argue with the idiot. He just tries to piss you off, as if groundless ramblings somehow move this market. I've tried to give some business resons as to why this stock is headed back down... perhaps into the 20's or worse if they mess up on already lower expecttions for Q3. I think they're doing the right thing by guiding lower for Q3, since they failed to warn for Q2. They're hoping to knock the lowered number out of the park, and redeem themselves on Wall St. Management thinking at Avid has always been, and will continue to be extremely short sighted... managing quarter to quarter. If they mess up Q3's lowered expectations, they'll announce all sorts of layoffs, then 3 months later, quietly add directors and VPs in the corporate office while the field staff is decimated. Talk to some AE's that were laid off after years of service if you don't believe me. Talk to more than your favorite Avid reseller if you're in the business. You might get candid answer from them, but most are very afraid of Avid repercussions if they're perceived as taking anything but a 100% pro-Avid position. (They quietly are diversifying as to not have to rely on Avid for their nut.) This stock will ratchet down, testing support as I've said in the past. If there's anyone on this board that's made the call right, it's been me. (And no, I was never fired by Avid, do not have a current position, and have made money both long and short on Avid.)
You may well be 100% spot on. You are giving your take on the business and I completely respect that and understand how you come to that conclusion. Wolf is just yelling "fire" in the theater the day after the place burned down. Here is why I dis-agree with your assessment, although it is well articulated and based on data.
1. I think the Pinnacle deal has taken some focus off the real growth component of Avids business - Broadcast Conversion. While the deal closed in August the reality is that they must have been spending lots of time and resources over the previous quarter(s). The acquisition of a public company is a huge undertaking and Avid has never done it before.
2. I actually have the exact opposite view on Avid Mgmt being "short sighted". I agree 100% that it has been the case in the past but just the fact that they are willing to take on PCLE to open up the consumer channel for their products for many years to come tells me they are thinking ahead. Particularly when they must know that the company will suffer in the short term because of all of the difficulties that come with acquiring a company and folding it into an existing business.
3. We can expect existing PCLE sales to slow because most people will wait to see how the whole thing shakes out before they will continue to support a company that has just been acquired. Again, this seems to ME to be long term thinking vs.. short term.
4. I don't doubt for a minute that you were "never fired" or disgruntled in any way. We have different views of this company that are actually both based on a combination of fact and logical prediction. I can not say that for the wolfster though..
The strong buy is because I do think, in the longer term Avid will be a stronger company for this aquisition. Because I am of the belief that this is what is causing this bump in the Avid road that obviously explains why I think it is a strong buy. It is NOT because I blindly think it will go back to $68 just because it was there once.
If you listened to the con-call, they blamed their miss on some engineering milestones in broadcast that slipped. Slipped far enough the b'casters did not take delivery of systems Avid expected to ship. In the past, Avid's "post" business was strong enough to take up the slack, and Avid pumped and dumped into their reseller channel, making them take delivery of stock and upgrades. They usually sandbagged (as they have for many many years) into the next quarter. The fact that they did not have the backlog to do so last quarter is hugely significant.
The Pinnacle deal may have distracted some in the highest levels of management, but engineering and sales were not engaged in that. The Pinnacle deal certainly impacted Pinnacle's sales, but had very little effect on Avid's.
Yes,, there are some broadcast benefits from the Pinncle acquisition, but it will take significantly longer than a quarter or two for them to be realized and rolled into the Avid branding.
The consumer channel requires a fair amount of infrastructure to support, and has its own difficulties with profit margins... so, the jury's out on whether that portion of the buy pays off.
Also, let me clarify something... Avid is specifically short sighted in its sales management. A couple of guys at the top at "C" level are brilliant, and they've done a great job of propping up the value of the stock while Avid's core markets or average selling prices have declined. Look at their major aquisitions... the broadcast company in madison was good, and not very expensive. The Digi buy was great, since they'd used their hardware and software anyway in Composer, etc. Digi folks became the tail that wagged the dog. The Midiman (or whatever that company is called these days) was Way too expensive. They bought Softimage because DS had the ability to kick their ass given the time to develop. Yet some at VP levels (and regional) of sales management are grossly over valued, and their style is leverge leverage leverage. They threaten, shout, stomp their feet. They've mistaken having a great product over the years for sales abilities. It's kind of like thinking you're a pro because you make money long in bull market, or short a falling market. Make money when you're contrary to the market, then we'll add "genius" to your title.
Those familiar down to the personal level of sales management at Avid know that sustain of current levels of success was not a good long term bet.
Again, if they knock the Q3's number out of the park, the stock will again rise, albeit with some of the shine off it. There's a good chance, given the possibility of some engineering milestones slipping further, or some large broadcast group becoming disgruntled, that the lowered Q3 number is at risk. If there was a quarter where Avid management could be distracted by the Pinnacle acquisition, this is it... not last quarter.
hey jackass--it would appear the "theater is on fire" why don't you continue to watch Steel Magnolias or whatever it is you were watching-hold your avid stock frimly between your butt cheeks where this pos belongs--AND BURN FOR ALL I CARE--IDIOT!!