What am I missing? Seriously...I want to know. I'm not an investor per se, just a holder of RKN.. I read everyone's posts here with great interest but sometimes I just don't grasp what's behind the vitriol and pessimism. I feel like there is a danger here that I'm underestimating (oh, I know it's bad, but HOW bad?)
I'd love to get some feedback on my simplistic view of what's been happening to RKN these past few months/years, and hopefully learn something...I'm always ready to learn.
Here's my take on the downfall of RKN...:
RKN was expanding and growing rapidly, the backlog was increasing. The Siemens acquistion went fairly well, and then they bought Orga to increase capacity to be ready for what looked like good times ahead.
Shortly afterwards, telecom started to experience a slump. After a period of growth, mergers and new players entering, telecom providers needed to start collecting revenue on their investments and at the same time competition got fierce. Purchasing and growth decisions were put on the back burner because of this and they remain there, which is poison for RKN so it starts to get sick.
Around the same time, perhaps even as a response, RKN started dabbling outside of it's usual bread and butter, trying to expand into non-telecom customers. Risky. On top of this the integration of Orga went very badly, costing more than expected.
So, put this all together and you have a company that tried to increase capacity dramatically (but was ill-timed), and bit off an aquisition that it had trouble chewing, all while their core market started to slump and they were burning cash waiting for the rebound and trying to diversify outside of telecom.
After several quarters of missed targets, ESW started paying attention and acquiring shares and when shareholders rebelled. ESW gives them 80M for what is essentially control of a company they hold a lot of shares in...and, based on that line from the Q1 report, perhaps an opportunity to buy it outright. Lucas steps down, presumably willingly since he's still on the board, and we start to see immediate changes.
So now ESW is in control, and they have acted quickly to pull back on targets, GET OUT OF THE NON TELECOM PROJECTS, likely slash a lot of staff to slow the cash burn, and refocus on their core business with a target of 120M.
That's what I see.
Please forgive my naivete, but isn't what we're seeing now exactly what we WANT to see? This is still a 100M+ company with a LOT of customers all over the world. Even if ESW is manipulating things to get the share price as low as possible so it can gobble up everything in sight, is that a BAD thing?
I'm not an investor really, just a holder of a significant numbers of RKN shares (significant TO ME, not necessarily others). I'm not experienced enough to know what sinister things could come of an ESW takeover...which is why I'm posting this. What I'M seeing as a stock market layman is ACTION...FINALLY....after what feels like years of missed targets with seemingly no adjustments to the business other than trying to find internal efficiencies...and it's coming in the form of supposedly experienced leadership who is pulling back on unrealistic expectations in a slumping sector, refocusing, getting lean, and concentrating on what got RKN here in the first place.
Isn't that good, relatively speaking?
You can flame me for being naive, I probably need/deserve it, or you can ignore me...I understand the frustration of having to explain things to a novice...but I'm hoping for a clearer understanding of why ESW is a villain in all of this...not because I don't agree with those of you who are upset with them, but because I fear I'm missing some really important perspective.
Sorry for the long post, but FactRbest made a good point about the discussions here being somewhat civil and smart so I thought I'd put myself out there...