Thank you for that very insightful and interesting post...great stuff. I wish we had more of this type of chatter on the board.
We are starting to see how significant the Broadcast portion of the Pinnacle acquisition will be. This really puts the finishing touches on Avid's Broadcast End 2 End solutions. Now Avid can fill broadcasters up with gear for just about every application in the newsroom/broadcast environment. This is all real good stuff...
One question though WHERE'S WOLFIE!!!!!!!
I hope that knucklehead is still holding on to his shorts because he is about to lose MUCH more than the lunch money his mom gave him.
Ok. I agree w/ you whole heartedly on Avid's inability to execute in the consumer space. They did not just buy some consumer products though. They bought the company including the people who clearly DO know how to do consumer. They also got the existing channels (Best Buy,Circut city, etc) so that is why I am optomistic about the aquisition.
Brook, why is it that my enthusiasm for this company and thier products pisses you off so much? You and Wolfie have no problem going over the top the other way...
Wow, there are a few folks here that do not lead off by calling people "cockroaches!".
I think this is a good entry point but with the caution that Q3 performance will be key to this stock in the SHORT term. This is a story where Avid consistently did better than the street expected for so long that the price was built on that assumption. A few facts:
1. Avid is hands down the leader in the Broadcast digital transition. I don't think anybody will argue with that.
2. One of the reasons given on the CC for the revenue miss was a few products that were late out of Engineering. That would say that when these products do release that revenue would be significant.
3. All other points on the balance sheet look fantastic. This is clearly a very healthy company that is well managed
4. By acquiring PCLE, Avids revenue will be in the $1 billion range. That is 100% more than a year ago and now diversified into the consumer space.
5. The consumer space is tough to get into..that's why Avid bought M-Audio and Pinnacle, they already have great presence on the retail shelves
6. The holidays are coming!! Avid has never had a consumer component to their business before. This will change some things.
Again, IMHO this move for Avid (Pcle and M-audio acquisitions) IS a long term play and one that I believe will pay off big time. I have made my money on Avid on the way up from $7 4 years ago and the same fundamentals still apply. This is an exciting space from a technology standpoint and the growth of Digital Video and Audio will continue for years to come. Avid has proven they are right there with the technology and I have not seen ANYTHING that would change my mind on that. Following the leader because a bunch of people jumped out when Avid missed the first quarter in 4 years is not what I would call a rational approach to analyzing this stock.
There are 2 that were released yesterday. Just scroll down below "Headlines" on the Yahoo stock quote and you will see the section called "reports". You will see them there.
No. The reason Avid is down is that they had a good but not great quarter and they were priced at a premium. The reason they tanked today was a for $$ report that was issued saying that business is hitting a flat spot http://reports.finance.yahoo.com/w0?r=34135921:1 . This is the same publication that Wolfie likely works for. If you do your own DD you can easily see the company is NOT going to $7..look at the y on y growth in all areas. It has to slow down at some point. Q 3 will put it back in the high 40's or into the high 20's. Its all about Q3 and 4 but anyone who follows Avid knows they RARELY disappoint.
Yes I remember you too Brookshanlon...how are those $16 puts doing? You boneheads make me laugh. While we were all making money hand over fist for the last 3 years you wizards were screaming that the stock was headed to the toilet. Now, for the first time in 3 years Avid reports a Q that was NOT bad but did not blow away the numbers and your right back to your losing ways. You missed the ride up and BELIEVE me you missed most of the ride down. This is the reverse of irrational exuberance if ever I saw it. Not one of you knuckleheads can tell me why a company with a ROCK SOLID balance sheet will not re-bound from a just-less-than-stellar quarter. Keep loading up on your shorts because you are going to lose them soon and your shirt too.
(note I did not call anyone an
With school starting in just a few weeks I can understand your frustration. I am sure Mom will let you use the computer AFTER your homework is done though...so don't be so down.
She may let you keep some of the money you made on your most recent "genius trades" too. I figure you pulled down at least $27 after taxes. You can buy lots of cool stuf like a trapper keeper!
BTW, regarding backlog;
if you have been listening to the CC's for a while you know that the old traditional "backlog" of Post gear is not what they are swimming in. It is mostly Bcst deals that are recognized over many quarters. I believe their backlog is as strong or stronger than it has ever been..the difference is that they can not just use it to "sandbag" as the revenue from these deals is usually on a strict timetable. The business has changed significanly since the days when Media Composer was at the heart of all Avid revenue. It is just a component of the bigger picture now.
I did listen to the CC, but slipped is not vaporized and I fully expect the engineering efforts that slipped will be realized soon. Now, I also agree that the focus will be on the integration effort over the next 2-3 Q's but again, I am not in this for the short term. I believe that Avid will come out the other side with strength in BOTH the professional and consumer Video and Audio markets. That is where we really part ways. Unlike you, I do not know the sales guys on a "personal" level...I do know that the products kick ass and that to me is the real indicator of the health and future prospects of any company.
As another point of reference; Until Avid acquired M-Audio, you could not find an Avid product anywhere but the Pro biz. Go into Target, Best Buy and other big box stores and you will see M-Audio AND Pinnacle all over the electronics department. This is INCREMENTAL revenue and it is right out there with the holidays coming. I know you do not put much faith in the consumer business but I happen to believe it will help Avid further its Pro business by giving them a consistent source of revenue outside the professional industry to rely on during difficult phases on the Pro side.
Just my Opinion
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.
I agree that the stock is stuck here in this range. I disagree that the wolfmiester has been "more right" over the last month though and that is exactly my point. Wolfie came in AFTER the bad q on 7/14/05. The price had dropped to $40.55 on that day. He likes you to THINK he was a genius and had actual data to support his "POS" claims...but he is just a sheep who will always be too late. We open today at $39.72 so at best Wolfie can take credit for predicting a drop of .83 or 2%. Not a real "Wizard of Wall Street" in my book.
what will happen longer term is all about Q3. If the numbers are back and the PCLE integration is on track, this turns out to be a blip and the stock will move higher. If not, then it will move down. I am only asking the Wolfster to provide some data around why he thinks Q3 will suck. If he can't do that then he is just a loudmouth idiot who missed out on the lucrative fall from $68.
Ok, I will bite.
You tell me why this is a "POS". You CAN"T. Do you know what products Avid makes, do ya?? Do you even have a clue who their competition is??
You are a real piece of work. You come in after Avid reports their first soft quarter in 3 years and start spouting your crap. Now if you were saying this stuff when Avid was pumped up to $68 then I would call you a sage. But since you clearly do not know what you are talking about I will call you what you are: an idiot. By the way, your read on the candles is a little late...how are those $39 puts working out for ya??
BUT YOU ARE WRONG AGAIN!!! While you poke fun of my predictions I HAVE BEEN PROVEN RIGHT AGAIN!! YOU are holding the bag and you don't even know IT. All of you cockroaches JUST DONT GET IT. I don�t need you to be proven right. This POS will crash TODAY, 9/1/2005!!! Right after lunch, wait and see.
Just remember cockroach, even a broken clock is right twice a day..Unless it has no hands, then it is ALWAYS right!!! Like me WOLFIE!!!
Bag holding bastages!
(It has nothing to do with reality, it is what wolfie says it is and you will always be a bag holding cockroach no matter what)
Los Angeles � In an amazing twist of time, space, and reality scientist today announced that the date has shifted to 9/1/2005. "We just can't believe it" said Dr Hugh G Chucklehead "The days of 8/17 through 8/31 are just plain gone and frankly we don�t know where they went" All of the scientists we spoke with were completely taken by surprise. "If only we knew this was coming we could have taken steps to prepare the public" As it turns out, someone apparently did have knowledge of this unbelievable event. �We found the email last night but could not make any sense of it". "Now I think we all know what it means". The email, received last night at 11:59 pm read only "YOU will be HOLDING the bag!! 9/1 will happen tomorrow and YOU will be holding the BAG you BAG holders!!!!" The cryptic note was only signed "Wolfie". �We really would like to find this Wolfie guy and find out what else he knows� said Dr Chucklehead. "If we know something like this is about to happen we can use that Emergency Broadcast System thing on TV to alert the public. I am not sure what we would tell them to do, but it would be really cool to use that thing�.
YOU ARE A CORPORATE SCHILL!!!!! Tomorrow is 9/1/2005 and you just refuse to believe it! 8/17/2005 is a POS!!!You just wait and see! You will be holding the bag tomorrow morning when you realize it is 9/1/2005!!!!!!!!!!!!!!! and I will be laughing at you, holding the bag, in your hands, because you are a bag holder, and you will be holding the BAG!
You are a FOOL. Avid has NO DEBT, A HUGE CAPTIVE INSTALL BASE and are CLEARLY the leader in their space. Ho could you do anything but go short this POS!
Sugar Daddy...is that you! I figured your Mom took away your computer and grounded you!
How are those shorts you placed at $12 back in 2002 doing???