It seems that being an executive of a high-tech, publicly traded company is not all roses, champagne and shiny shoe phones.
How would you like to have been Calgary CEO Michel Fattouche under fire from an angry mob of shareholders at Cell-Loc’s recent annual meeting with the stock worth about 15 per cent of its high of $80 in March?
Of course, Fattouche has plenty of company. Numerous other tech companies, including Cell-Loc’s sister company, Wi-Lan, have suffered a similar fate.
Life in the hot seat of a high-tech company is not for the faint of heart. A CEO’s pulse races with the stocks charts. He leads a frantic lifestyle and, when he signs on to his laptop for a quiet moment, there’s a maniacal shareholder screaming at him from a chat board.
And, yes, I swear I heard Chell Merchant Group CEO Cameron Chell’s shoe ringing during a recent visit to his Springbank home.
So when I found my pal Bre-Xer thumping the tub over his latest brainstorm, ceohairreplacement.com, I suggested he not take the company public.
“I’m sure the world is dying for the next dot.com,” I reassured my pal, who had the misfortune of losing his locks during the Bre-X swindle. “But don’t go public. Your heart can’t take it. Your pulse will look like Cell-Loc’s chart.”
A recent chat with Ted Hellard, chairman of private Calgary-based company Critical Mass, was a soothing calm after the storm of high-strung public-company CEOs. Critical Mass is a huge success as a provider of online marketing services to blue-chip companies such as Mercedes-Benz USA.
The placid Hellard showed for a meeting in the hard-hat construction zone that will soon be the company’s home sporting a casual ball jacket, a full head of hair and NO CELL PHONE. He seemed oblivious to the jackhammers — and a volatile stock market.
“For me the moment you (go public) all you’re doing is answering to the public market,” Hellard explained. “So you don’t make decisions based on where you and your employees want to go. You make decisions based on whatever the market analysts say your quarterly earnings should be. So quite often you make bad decisions, to be honest. You’re not willing to take risks because you know the moment you don’t hit your earnings, you’re going to get hammered.
“So as long as you’re private, you control your own destiny and your own choices and your own vision. And to hell with the market. The only people you’ve got to answer to are the people who work for you. And, to me, that’s what a family does. The moment you step outside that boundary into the public markets, you’re virtually a slave in my opinion and a slave to the market’s money. And I just have no desire to do that.”
ANALYST'S THREE STARS
Anna Beukes, analyst at Edmonton-based Roche Securities, is bullish on an old-fashioned, old-economy construction company, Churchill Corporation, as well as a pair of dot.coms — Videoflicks.com and PhotoChannel Networks. Edmonton-based Churchill (CUQ-TSE) had a recent price of $1.64 with a year trading range of $1.25-$2.00.
“I’ve just done a research update on Churchill and I have so much confidence in this company,” said Beukes, rating it a strong buy. “In terms of earnings per share, it had eight cents in 1996, 25 cents in ’97, 27 cents in ’98, 32 cents in ’99 and the book value per share at the moment is $1.97.”
Beukes says videoflicks.com (YVF.U-CDNX, .25 recent price, range .20-$1.50) and PhotoChannel (PNI-Montreal Exchange, $1.05, range .35-$3.80) are speculative buys (for portfolios with above-average risk tolerance). Videoflicks.com is an online video store that recently landed actor Burt Reynolds as a spokesperson and director.“They have no debt,” said Beukes, “and I think it’s a steal at these prices.”
PhotoChannel offers a complete range of online photo services and, says Beukes, “I think they have all the building blocks in place to become an industry leader.”
TRADING TIP Putting too much stock in overall market numbers can lead to panic selling. Focus on individual stocks, reviewing the fundamental reasons why you bought the stock in the first place.
SITE OF THE WEEK: cdnx.ca
The official site of the Canadian Venture Exchange offers a wealth of data. Quotes come all-dressed with company snapshots and the crucial market-depth stats, showing bid/ask prices, bid/ask sizes and brokerages. The Toronto Stock Exchange site (TSE.COM) does not offer market depth with quotes but only shows the last five trades.
HOT STOCK
STAMPEDE OILS STF-CDNX .24 Up .09 (60%) on 1,180,000 shares (week ending Nov. 10)
Stampede’s share price stampeded to within a penny of its year high on news the Calgary company had reached total depth on its Turner Valley test well and was on the verge of production testing. Stampede, which has traded as low as three cents in the past year, operates the well and has 24-per-cent interest with Bearcat Exploration, Panda Petroleum and Curlew Lake also involved. (Prices based on Friday, Nov. 10, 2000 close)
COLD STOCK
SEARCH ENERGY SGY-TSE $1.70 Down .89 (-34%) on 1,846,000 shares.(week ending Nov. 10)
Search Energy precipitated a sell-off when it announced that it was revising its production forecast for the fourth quarter based on its three wells in the Klua area of northeastern British Columbia. The Calgary oil and gas company has been beaten down to 50 per cent of its year high despite boasting an attractive price-earnings ratio of 9.2. Its year low is $1.02. (Prices based on Friday, Nov. 10, 2000 close)
