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Gerry Fraiberg
Avid In Danger Of Delisting From NASDAQ
on Mar 23, 2013 at 6:58:20 pm

Interesting mention of the effect FCP X is having...

Apple’s update to its video-editing software Final Cut Pro included additional features that would make it easier for editors preparing video for broadcast. The update hampered Avid's efforts of courting Final Cut X users because its first release didn't include specific features needed by professional editors.


http://www.bizjournals.com/boston/blog/techflash/2013/03/avid-in-danger-of-...



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Jamie Franklin
Re: Avid In Danger Of Delisting From NASDAQ
on Mar 23, 2013 at 7:41:20 pm

[Gerry Fraiberg] "Apple’s update to its video-editing software Final Cut Pro included additional features that would make it easier for editors preparing video for broadcast. The update hampered Avid's efforts of courting Final Cut X users because its first release didn't include specific features needed by professional editors."

Um...is this an Onion article?


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Oliver Peters
Re: Avid In Danger Of Delisting From NASDAQ
on Mar 23, 2013 at 7:47:48 pm

Nice to know the business press is pretty clueless.

Oliver

Oliver Peters Post Production Services, LLC
Orlando, FL
http://www.oliverpeters.com


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Brett Sherman
Re: Avid In Danger Of Delisting From NASDAQ
on Mar 23, 2013 at 8:10:23 pm

While it may be devoid of the finer points. I'm not sure what exactly is inaccurate in the reporting. FCP X did add features which allowed professional (including myself) to start using it.



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Oliver Peters
Re: Avid In Danger Of Delisting From NASDAQ
on Mar 23, 2013 at 9:02:41 pm

[Brett Sherman] "While it may be devoid of the finer points. I'm not sure what exactly is inaccurate in the reporting. FCP X did add features which allowed professional (including myself) to start using it."

Because FCP X's updates have nothing whatsoever to do with Avid's current financial position. For the reporter to make the inference that this is somehow tied to the NASDAQ situation is uninformed at best.

- Oliver

Oliver Peters Post Production Services, LLC
Orlando, FL
http://www.oliverpeters.com


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Chris Harlan
Re: Avid In Danger Of Delisting From NASDAQ
on Mar 23, 2013 at 9:47:39 pm

[Oliver Peters] "For the reporter to make the inference that this is somehow tied to the NASDAQ situation is uninformed at best."

Emphasis on at best.


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Chris Harlan
Re: Avid In Danger Of Delisting From NASDAQ
on Mar 23, 2013 at 9:46:03 pm

[Brett Sherman] "While it may be devoid of the finer points. I'm not sure what exactly is inaccurate in the reporting. FCP X did add features which allowed professional (including myself) to start using it.
"


Sure it did. But X adding beta monitoring and multicam are hardly the source of Avid's problems, or the potential origin of its downfall. You could make that argument about the whole history of FCP 1-X and you'd be a lot closer, but you'd still be wrong.


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Brett Sherman
Re: Avid In Danger Of Delisting From NASDAQ
on Mar 25, 2013 at 1:51:09 pm

[Chris Harlan] "But X adding beta monitoring and multicam are hardly the source of Avid's problems"

Funny how people get different things from the article. I don't think the article is saying that FCP X caused Avid's downfall. Rather that Avid's attempts to lure former FCP customers was not successful. In part, because of improvements in FCP X. But whatever.



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Oliver Peters
Re: Avid In Danger Of Delisting From NASDAQ
on Mar 25, 2013 at 2:12:34 pm

[Brett Sherman] "Rather that Avid's attempts to lure former FCP customers was not successful. In part, because of improvements in FCP X. But whatever."

Which is also not true, nor is the reporter qualified to make that assumption.

- Oliver

Oliver Peters Post Production Services, LLC
Orlando, FL
http://www.oliverpeters.com


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Chris Harlan
Re: Avid In Danger Of Delisting From NASDAQ
on Mar 25, 2013 at 5:09:26 pm

Hey! I think its funny the way you interpret the things I say, but as long as we are all entertained, I guess we're getting somewhere.


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Michael Phillips
Re: Avid In Danger Of Delisting From NASDAQ
on Mar 23, 2013 at 8:13:20 pm

I have always been somewhat surprised that the "street" sees Avid as just Media Composer. Not that it is an important element in the portfolio with a halo effect on other solutions, but interesting to always see the pigeon holing of the company as one product. Not that there are challenges and such with Avid - Perhaps Avid needs to do a better job at telling its own story, but I have always found the street's understanding of the company limited.

And it will be interesting to see what this whole thing has been about when it is said and done.


Michael


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Shane Ross
Re: Avid In Danger Of Delisting From NASDAQ
on Mar 24, 2013 at 11:05:52 am

That article made me laugh out loud.

Shane
Little Frog Post
Read my blog, Little Frog in High Def


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Craig Seeman
Re: Avid In Danger Of Delisting From NASDAQ
on Mar 24, 2013 at 3:11:57 pm

Consider this, the not so funny possibility that some portion of the "business interested community" (however one defines that) has a serious misconception about Avid's business model and product offerings and that such entities and people are making decisions based on that.

Wildly speculative but maybe Avid themselves are aware of such misconception and part of the reasoning on their loss leading trade up offers is to increase MC's market share so such entities might perceive growth in market penetration.

What is unknown is whether it's an isolated case of sloppy journalism from one reporter at a business publication or whether it's parroting a belief held by some portion of the business community. We have no obvious way of knowing but my own personal hunch as that there's a significant portion that still see Avid primarily as the "Media Composer / Symphony" company in which all other products play supporting roles.



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Chris Kenny
Re: Avid In Danger Of Delisting From NASDAQ
on Mar 24, 2013 at 4:53:11 pm

[Craig Seeman] "What is unknown is whether it's an isolated case of sloppy journalism from one reporter at a business publication or whether it's parroting a belief held by some portion of the business community. We have no obvious way of knowing but my own personal hunch as that there's a significant portion that still see Avid primarily as the "Media Composer / Symphony" company in which all other products play supporting roles."

Aside from pro audio products (which, I know, are a significant revenue source), isn't this largely true though? I mean, Avid presumably makes a bunch of money off of Isis, etc. but if Media Composer disappeared tomorrow, how many FCP or Premiere shops would really choose Avid as their default storage vendor? How many would choose DS as a finishing solution if they weren't doing their offline in Media Composer? While Avid's other video products can technically be integrated into workflows that don't involve MC, I think they'd take a big hit if it really died.

Plus, hardware commoditization is a huge part of what has gotten Avid into so much trouble in the first place, which suggests that shifting even more to hardware products is probably not a great idea. I think Media Composer really needs to succeed if Avid is going to have a significant future in pro video.

--
Digital Workflow/Colorist, Nice Dissolve.

You should follow me on Twitter here. Or read our blog.


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Tim Wilson
Re: Avid In Danger Of Delisting From NASDAQ
on Mar 24, 2013 at 6:05:58 pm

[Chris Kenny] "I think Media Composer really needs to succeed if Avid is going to have a significant future in pro video."

Agreed...but this still doesn't have anything to do with stock.

The "scandal" at the heart of the delayed 10K filing is whether specific "bug fix" releases meet the definition of post-contract customer support under the rules of US GAAP. If so, Avid can re-classify these costs and any associated revenue as customer support.

And yeah, the delay in filing means an automatic notice of possible de-listing. Nobody at either Avid or NASDAQ is surprised by this.. But, as much as I hate sports metaphors, sometimes it's better to take a delay of game penalty than run the play before you have all the players on the field.

In the meantime, the company has cash on hand and no debt....

...which still doesn't say anything at all about Media Composer.

One of you business whizzes can tell me if it would be worth Avid taking the company private so that they can focus more on fixing the business than spending cycles talking about stock. There's a cheap punchline and a rimshot in here somewhere about it meaning we could spend less time talking about Avid's stock in this forum, but I'm not quite putting my fingers on it. LOL


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Craig Seeman
Re: Avid In Danger Of Delisting From NASDAQ
on Mar 24, 2013 at 8:29:45 pm

[Tim Wilson] "sometimes it's better to take a delay of game penalty than run the play before you have all the players on the field.

In the meantime, the company has cash on hand and no debt...."


Agreed, but the extent of the penalty is unknown and therein lies a problem.

The one thing the stock price might have impact on is to the employees who have been compensated in stock.

[Tim Wilson] "One of you business whizzes can tell me if it would be worth Avid taking the company private so that they can focus more on fixing the business than spending cycles talking about stock"

Not that there were any business whizzes involved but that was one of the points of post in the other recent thread. His argument was that he didn't think there was anyone inside the company willing to provide the capital. There doesn't seem to be a "Michael Dell" type there.



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Craig Seeman
Re: Avid In Danger Of Delisting From NASDAQ
on Mar 24, 2013 at 8:17:30 pm

[Chris Kenny] "I think Media Composer really needs to succeed if Avid is going to have a significant future in pro video."

Which leads me to wonder if it would makes sense for Avid to do what EditShare is doing. Get the NLE seeded everywhere and then focus on offering value added products that potentially bring in big revenue.
Consider what Blackmagic does with Resolve as well.

I do wonder if Avid's $999 cross-grade has resulted in any increase in Isis sales.
If Avid's goal is to sell an integrated solution with upfront hardware costs and long term steady income from service and support contracts.... my guess would be they haven't succeeded.



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Craig Seeman
Re: Avid In Danger Of Delisting From NASDAQ
on Mar 24, 2013 at 2:14:33 pm

Details from Yahoo Business
http://biz.yahoo.com/e/130321/avid8-k.html
also reported on CNBC
http://www.cnbc.com/id/100579413

Also, from what I understand, the issue around bug fixes and updates and their accounting is that it might have resulted in Avid overstating their revenue in their early 2012 report. That would mean that people who bought Avid stock after that were buying based false information regarding their finances from that point forward. Hence the nature of all the law firms looking to start class action lawsuits.

So it seems Avid delayed their report because that probably would have perpetuated their revenue issue, perpetuating the reporting problem from the previous year. One might guess that the CEO change might have been due to some internal discovery around this issue.

In any case, Avid is now facing two serious issues. One is the SEC and legal repercussion due to the issues around reporting from early 2012. The other is the potential delisting if they don't file an approved plan by May 20 and must regain compliance by Sept 16. If the May 20th plan is not accepted they can appeal.

I can speculate where this might all might lead to....
I'll just say this, think about how this might affect some of their potential "big iron" sales. I suspect a lot of near term purchases might get put on hold until May 20.

The vibe around the Avid booth at NAB might be very interesting.



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Herb Sevush
Re: Avid In Danger Of Delisting From NASDAQ
on Mar 24, 2013 at 2:48:25 pm

[Craig Seeman] "think about how this might affect some of their potential "big iron" sales. "

I can't see how this would affect any potential sales, but feel free to speculate, you always have before.

Herb Sevush
Zebra Productions
---------------------------
nothin' attached to nothin'
"Deciding the spine is the process of editing" F. Bieberkopf


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Craig Seeman
Re: Avid In Danger Of Delisting From NASDAQ
on Mar 24, 2013 at 3:30:41 pm

Some people (even if just a small portion) may be concerned about long term support of their potentially significant hardware facility investments. Again it doesn't have to be the majority. Even if it's just 5%-10% that's a sales hit the company really can't sustain. That's why Avid added the comments they did to their March 22 press release about receiving the delist notice. They are well aware of the potential sales impact.

There's several potential outcomes, the best of which, Avid confirms there's been no accounting issues and they were just being cautious, they get the plan in by May 20, staff is OK with it. Nothing bad happens.

The other is that Avid knows there are irregularities, stopped the latest report as damage control (more law firms jumped in immediately after the release as far as I can tell). They have a class action settlement resulting in another big financial hit. In the mean time they get the revised report in with staff approval and prevent any further damage. Keep in mind that in addition to the class action settlement, the revised report reveals the lower revenue which also does additional damage to them but they avoid delisting.

Note that any portion of staff and management who receive any kind of renumeration through stock have to be concerned that might become "play money" (value near worthless).

Who knows how they're compensating various people on the "Avid team" but this also may impact their ability to hire or retain some people who would be compensated as such. Of course it might mean the need to higher cash compensation... and that's another financial hit.

To the facility buyer, some may seriously question long term support for 5, 6, 7 figure hardware sales. All the above creates uncertainty. That is going to impact sales. Maybe not outright cancelations but it means a bunch of hardware sales and service contract renewals are going to bet put on hold until May 20. Not all, maybe not most, but enough to simply deliver another financial hit. Basically any facility buyer that's risk averse is going to hold off.

I'm not saying Avid's not going to make it through this. All this does open risk up further and it's simply not going to be good for sales around products whose ROI involves long term support.



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Craig Seeman
Re: Avid In Danger Of Delisting From NASDAQ
on Mar 24, 2013 at 3:39:21 pm

The "Reader's Digest" version.

The threat of delisting can impact employee and management compensation which can impact personnel resources.
The class action lawsuits settlements impact Avid's financial resources.

Both can impact product support. That they might, whether or not either comes to pass, that it simply might, means some sales are going to be delayed.



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Tim Wilson
Re: Avid In Danger Of Delisting From NASDAQ
on Mar 24, 2013 at 4:19:56 pm

Avid stock today is right about where it was in November 2011....which is right about where Apple stock was at the beginning of April 2003, $6-ish, give or take. Avid stock at the time was at $10.

By the beginning of October 2004, now 3 years after the introduction of the iPod, Apple was all the way up to $10. Avid was at $57.

What would you have learned about the relative value of FCP to Media Composer over those 18 months? What a ridiculous question. To Michael's point above, you might as well ask, what would you have learned about the relative value of Avid's MIDI keyboards or Bomb Factory plug-ins vs. Apple's slot-loading Xserve or iPod Photo, all of which were hot products introduced during this span?

The answer: absolutely nothing.


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