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Message: Alton, srandl & Cautious

Alton, srandl & Cautious

posted on Feb 27, 2009 10:53AM

I understand each of your points and agree with you all in large part, but my point is that RG signed up to be the CEO of a PUBLIC company, not a private one. Therefore, his obligations are to the SHAREHOLDERS and primarily in the form of returning value to us. And his window to perform so can't be an open ended one, anymore so than is is for each of us to perform at our own jobs.



All of those points you each make are obviously valid, and important, but in the end, if his moves and decisions, however, proper and constructive, don't create shareholder value in the form of a higher pps or some other distribution (dividend - don't get me wrong, I'm not calling for one), then they are for naught.



As for him controlling the pps, I disagree that he has no control over it. He has a great deal of ability to influence the pps, and he can create a higher pps by attracting investment dollars to the company by telling a story and creating a situation whereby more are attracted to buy than to sell at current levels. Obviously, we believe that that is what he's in the PROCESS of doing. While I believe in a substance over style approach to management, he has to ultimately have both in his skill set, and to convince the market of the benefit to buying PTSC. To date he hasn't done that.



I agree that NOW is NOT the time to FULLY judge RG, but I do beleive that NOW is ALWAYS the time to judge RG, just as it is to judge ANY employee or hired hand. You have to continuously evaluate them, and make sure that they're doing what you believe is correct and in line with the goals. Allowing him 2 more years to restore the pps to 42 cents is not acceptable in my evaluation. Allowing him 2 more years to get to $1 or $2 is acceptable, IMO, provided there is movevement in that direction. I didn't expect RG to come in and have us at $1 or $2 within his first year, however since there is little that we know now, that we didn't know when he came on board (Quanta ruling aside), I certainly didn't expect RG to have us at 10 cents either.



So on that basis, I think he deserves some criticism, as well as he does praise for the other issues he's executed on. And consdiering we know that Swartz has been selling on averate 65K shares a day for the last 2 years, perhaps, RG could have or still can make some effort in that area to curtail Swartz's ability to pressure the stock down by selling. Simply based on averages, Swartz will be continuing to sell through the end of May, and thus, with no other news, we can expect additional steady sell pressure on the stock.



My overall concern and the point I'm trying to make is that none of us, INCLUDING RG, knows what challenges tomorrow may bring with respect to internal or external issues with the company or economy. I don't think he can or should just sit back and execute on the business plan and IGNORE the share price action, as the lower pps will ultimately affect his ability to execute on the business plan, as he has stated himself that stock will be the main currency used in acquisitions. With that in mind, I judge him based on the pps, and while I don't give him an F as a grade, I don't give him an A either. I'd give him a C+ to B- with some notes of encouragement to try harder, and to let him know that I think he's on the right track, but that a better effort will put him over the hump.

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