Wednesday, March 11, 2009

Sense of Urgency

The markets have regained most of the losses last week and UT stock is down 2 cents so far this week after surffering a 31% decline last week. It seems that almost everyday, there is a company coming out and defending their stock. The only thing we've seen from UT are the insider (tax) sales at 70-93 cents! This is sickening for shareholders and a total lack of a sense of urgency from the company/management.

An updated "earnings" estimate for 2009 and 2010 (from yahoo) are for losses of $1.25/share and 52 cents/share respectively. Revenue is at $556m and $668m. And as we've seen, the company hasn't exactly been meeting expectations, no matter how low they are. In any case, is a company operating at a loss EVERY quarter since 2004 and projected to continue to at least 2010 even a viable business?

With still around $270m in cash after this current quarter's massive $50m loss (does this even bother the company anymore?) and a book value in the $4 range, it really is time for shareholders to demand action from the management/board now before the asset base is eroded further. Companies such as Ericsson have $5 Billion/year R&D budget and their competitors such as Huawei have revenues in the $15-20 Billion. How can UT compete at this stage? The board has not or cannot come up with ways to enhance or even preserve shareholder value. Is this not the time to demand an explanation from the board on why they are not doing their fudiciary duty to shareholders?

Today, I participated in a productive conference call with other shareholders and there will be action taken. However, I am writing tonight to ask all shareholders to send an email to management/board to demand action to address the stock price, their still enormous cost base, and lack of plans to get to profitability. A quick survey of the probable revenues and gross margins show at the minimum, they would have to cut expenses to $40m/quarter or lower, which is way below the company's target of $60m by Q4 this year. Shareholders need to demand a significant change in the way the company operates its business. If the company cannot or will not do it, then it means the business is really not viable and we need to face the sad reality of salvaging the remaining shareholder value.

If you are a current shareholder, I ask that you send an email to Peter Blackmore, Barry Hutton, and the board of directors indicating your frustrations and support/demand for change. Add the number of shares that you own and please copy me on the email.

My email is

Have a good evening.

PS. Last year, I had a list of about 75-80 people in the exploratory group. If you were not part of the group and want to be included in the email list, let me know as well.