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[sharechat] ADV interim profit announcement next week-

From: "Peter Maiden" <>
Date: Sun, 25 Feb 2001 10:01:12 +1300

I do not have any Adantage shares but I always look forward to announcements from this company. Not always for the financial numbers but the way the announcements are written - with plenty of enthusiasm etc. I wish that Ben could get Advantage to join his Company Wire.
What will the ADV interim profit announcement bring next week. A good result?  - bear in mind it has to be compared to a $2.756M profit for the first half year last year followed by a pretty flat $0.2M in the second half of the year. In light of recent increase in ADV price hopefully good news.
Remember the start to last years interim profit announcement
"Advantage is a rarity amongst e-commerce companies: we're profitable," says Advantage CEO, Greg Cross. "We're a new-economy company and ours is a growth story, but we're delivering the type of profits
that you'd expect from a more traditional company. In other words, we're a real business with real
operations, real people and real customers."
What I am interested is in how earnings per share turn out. The time has come when the expected earnings from acquisitions (made with large issues of shares) need to come to fruition.
I wonder what this announcement from ADV  will bring. I am looking forward to March 1st. Exciting times.
On the subject of managing shareholders expectations this was in the NY Times the other day. It is Sunday so do take time for a quick read. Quite amusing and no suggestion that greg Cross should follow this dudes lead.
February 22, 2001

Market Place: The Chief Executive as Chief Cheerleader


Chief executives of publicly traded companies know that in addition to managing their companies, they must manage their stock's price. And with so much executive pay riding on a rising stock price, they have great incentive to be especially skilled spin doctors in today's dreary stock market.

No one has taken to the task more assiduously than Gary C. Wendt, chairman, chief executive and head cheerleader of Conseco Inc., the troubled insurance and financial services concern. Mr. Wendt was brought in from General Electric to redeem Conseco last June after a disastrous acquisition made by the previous management had practically leveled the company.

A few months after he arrived, Mr. Wendt outlined his restoration plan for the company in a traditional press release. Investors were unimpressed; the stock closed down 11 percent the next day.

On Oct. 17, after the close of trading and with Conseco's stock at $5, Mr. Wendt published "Turnaround Memo No. 2," the first in a series of such memos written in folksy style to shareholders. The stock rose 15 percent the next day.

In the eight months since Mr. Wendt arrived, nine memos have appeared. Most have been a tonic for battered Conseco shares. On Tuesday, after the market had closed, Mr. Wendt announced Conseco's full- year 2000 earnings and fourth-quarter results in Memo No. 9. In spite of posting a net loss of $378.7 million for the quarter and taking $420 million in special charges, Mr. Wendt accentuated the positive. "We did battle; we survived; we're positioned to thrive; and we like what we have to work with!" his memo exulted. The stock rose 2 percent yesterday, to $14.18.

When Mr. Wendt arrived at Conseco, said Mark Lubbers, a company spokesman, the company's reputation had hit such a nadir that the chief executive decided he had to take his plans for a new Conseco directly to shareholders. "We're inventing something here that may be an important nuance in the way business communicates with shareholders and other stakeholders," Mr. Lubbers said of Mr. Wendt's memos.

It is to his credit that Mr. Wendt chose to communicate directly with shareholders, shedding light on his activities. But while his memos started out as no-nonsense descriptions of how the company's turnaround was progressing, the messages of late have had more of a promotional tone.

For instance, early on Jan. 23, Mr. Wendt published his sixth memo, in which he noted that Conseco's stock had risen more than 60 percent in a month, fueled in part by a market rumor that Warren E. Buffett was buying Conseco bonds, reported in The Wall Street Journal on Dec. 29. Mr. Wendt wrote that he did not know the extent of any investment by Mr. Buffett in the bonds, but "we do know that the value of Conseco's bonds has risen significantly." The stock rose 8.3 percent that day and hit a high of $18.50 less than a week later.

Mr. Lubbers, the Conseco spokesman, said that Mr. Wendt felt compelled to discuss the rumor of Mr. Buffett's activities because it was rampant in the market. "That was front-and-center news," he said.

Since then, Conseco shares have drifted lower and Mr. Wendt's memos have come to resemble damage control. On Feb. 9, for example, after Fortune magazine reported that Conseco bonds were in fact not among Mr. Buffett's buys, Mr. Wendt hurried memo No. 7 into print. "The important news about Conseco is not who owns our bonds," he wrote, forgetting perhaps, that it had indeed been important news a few weeks earlier.

Last week, The Wall Street Journal disclosed details of an amended class action lawsuit filed against Conseco in January. The suit contends that the company's former executives cooked the books, and that this is what forced the company to restate its earnings for 1999 in the amount of $350 million.

Fifteen minutes after the market opened, Mr. Wendt had memo No. 8 on the wires. In it, he said that the lawsuit was old news, that he had known about it before he joined Conseco last year.

But there was news aplenty in the amended complaint. The suit, brought by two municipal pension funds that lost $1.5 million in Conseco securities they owned when the company restated its earnings, is filled with detailed allegations of fraudulent actions taken by employees of the company before Mr. Wendt's arrival.

In his recent memo, Mr. Wendt said that "the fraud allegations made in this complaint are so wild as to be, literally, fantastic." He added that the data did not support the allegations.

But this time, Mr. Wendt's spin did not work as well. The stock fell 5.3 percent the day the lawsuit was reported.

Douglas M. McKeige, a lawyer at Bernstein Litowitz Berger & Grossmann in New York, who represents the pension funds that are the lead plaintiffs in the case, said, "We stand on the allegations that are in the complaint, and our clients look forward to continuing to litigate the matter." The loss in the value of Conseco stocks and bonds in the period covered by the suit is in the billions of dollars.

The Conseco spokesman said that Mr. Wendt at times played defense in his memos, a game plan he had to take up because of the throngs of investors who had bet against Conseco's turnaround by short-selling its shares. "We wanted to be able to attack back very swiftly," Mr. Lubbers said.

After digesting Tuesday's earnings report, Kathleen Shanley, a corporate bond analyst at Gimme Credit, an investment research concern in Chicago, said in a report to clients, "It's no longer 2000, but it's still winter and Conseco is still snowing investors under with its creative spin on its latest financial results." She advised her clients to avoid Conseco's long-maturity bonds.

Investors should remember that, in contrast to company financial filings, the enthusiastic words in Mr. Wendt's memos and press releases are not regulated by the Securities and Exchange Commission. Indeed, regulators say, investors should be skeptical of anything they read in corporate press releases today.

"I would have to give Gary Wendt credit for a masterful public relations job after some initial false steps, using the turnaround memos as a bully pulpit to rally the troops," Ms. Shanley said. "But the only things I would take to the bank on Conseco are what they put in their S.E.C. filings."

Copyright 2001 The New York Times Company

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