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UTStarcom Holdings Corp. Message Board

  • marksymonk marksymonk Jul 7, 2011 5:09 AM Flag

    Hello Again

    Interesting to see how the current price is attracting nostalgic and obssessed people with this stock. I am surprised that my prediction for the stock price seem to have been very accurate, I am not gloating, I am just surprised that the new management team came up with nothing to change the downward spiral. The more time passes the evidence accumulates that the warning signs that I have been trying to highlight for nearly two years are adding up to almost compelling evidence that this company has been mismanaged by people uniquely interested in liquidating the assets and pocketing the maximum returns visible(compensation) and invisible (related party transactions?).

    This is what I find extremely worrying:

    - Since early 2009 management announced a major shift by refocusing investments and efforts on the China and India markets. Two and half years on, there is not a single significant China contract. Usually such a shift in strategy would follow major new contracts. In fact since the announcement the India market for UT seems to be falling apart and the China market where they are spending all their efforts is not showing any signs of success.

    - They just announced 10M revenue recognition with a European customer, this means that Europe where they no longer have staff may produce 20% of Q2 revenues, PAS another 30%, Japan perhaps another 30% , leaving only 20% for India and non PAS China!!

    - While the management strategy is clearly a failure the latest shareholder meeting has made two key decisions. The first is to protect the current senior management for three years with luxurious packages including both expatriate and Chinese benefits, and created a convoluted new holding structure Cayman, etc, etc... that is very difficult to understand, to control or audit cash flows.

    - The mention PWC doing some work but only until DEC 2011! what happens after?

    - The new executive team includes only Two people: the CEO and the CFO, hmmmm?!!

    No contracts, none of significance in the focus markets of China and India, extremely opaque new company structure, non existent management team, young talent probably all gone to competitors, fast declining market credibility, and greedy investors/tradors want to play this stock? Yes some will make profits on this dead cat bouncing, on rumours or some new ocntract announcements, but they are ignoring reality. This company has been promising profitability for more than four years now and they are as far from it as ever.

    Reality is what has been evidently going on for at least three years now: asset liquidation with the liquidators (senior management team of Blackmore and his successors) the only gainers from the fire sale of this once mighty and rich company.

    Finally I maintain my prediction, that without (unlikely) major positive new announcements, the stock is bound to go below 1$ in six months or less.

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    • >>>Yes, please explain why the company is priced below cash and book value?<<< First, this is only temporary. The stock price was in $2.60 range (roughly 2x book) at beginning of May, just 2 months ago. Everything you mentioned or, that has been mentioned on this board by short sellers, was known then, and there has been NOTHING significant that has changed since then, other than positive contract news. What has changed is that stock was dropped from Russell 3000 because it became an ADR from Cayman Islands (9 million shares forced to sell)and erroneous Bloomberg article (picked up by 2 other news services also) that named UTSI as a "Chinese reverse merger company"(only because of Cayman Island switch to UTStarcom Holdings) and article told how SEC was investigating these companies and shutting some down (totally false about UTSI being investigated) This scared the pants off of small retailers and brought in large number of shorts. This stock has many times doubled or tripled in a month or two after being beaten down by same type of erroneous news (which I revealed each time back then as I bought). The "Market" didn't know anything back then and was certainly majorly wrong then when it went below cash and book value each time, and the "Market" doesn't know anything now and is certainly wrong.

    • The company has $327 million in cash (20 mil restricted)and is below book value. They sold off Audiovox division and building which is what previous buyers didn't want. UTSI wanted $1.5 billion back then, over $10 a share. I think they would settle for $500-$600 million now, Less then $4 a share. In addition, India is now finally resolving wireline roadblocks (UTSI has 19.1% market share there while Huawei has only 4.8% and ZTE 5.7%). Cable regulations have been resolved in China. UTSI is gateway to convergence and Chinese controlled movies. Huge growth in IPTV is projected over next 5 years and Huawei and ZTE both want UTSI technology and are currently working along side of UTSI. Do I really need to say more?

      • 2 Replies to davecarneyinc
      • ==Do I really need to say more?==

        No, please don't. You've already done enough damage! <chuckle>

        $1.37, -$0.05, (-3.52%)

      • Yes, please explain why the company is priced below cash and book value?

        The same nonsense we heard for years now about India BB, IPTV and China IPTV, both of these markets seem to have been a huge drain on the financials. If it was not for PAS and some high margin projects in US, Japan and Europe the catastrophic losses of India and non PAS china would have been shocking to shareholders, especially if you consider that the company strategy of focusing on China and India means that most of their R&D costs should be allocated to India and China, making those losses even worse. Furthermore the new management had promised big vendor financing deals to win the china cable business. Even with such offers of throw away cash they don't seem able to close significant deals. We will have to wait and see what Q2 results tell us, but all indications are, it will be another station passed on the way to a complete train wreck.

    • >>>this company has been mismanaged by people uniquely interested in liquidating the assets and pocketing the maximum returns visible(compensation) and invisible (related party transactions?).<<< The fastest and easiest way for insiders to make the maximum gain is by selling the company, not by compensation or options, but a guy like you can't figure that out.

      • 1 Reply to davecarneyinc
      • The management of UT have tried many times to sell this company and there were so mnay rumours about potential buyers, including Cisco, Ericsson and others.
        The reality is that they tried and failed to sell the company as all potential buyers didn't like what they saw after dur diligence. So what was plan B? I am sure you can figure this one out: plan B is the plan started by Balckmore and that is to sell the company asset by asset instead of selling it in bulk. This has been happening for three years now and in the end, very soon, approximately one year, this company will be totally depleted of any value.

2.66-0.02(-0.75%)11:35 AMEST

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