Re: POLL: Avid
Avid, Maker of Pro Tools, Now Losing Money Faster and Delisted from NASDAQ - Create Digital Music
Restructuring efforts at Avid maker Pro Tools seem to have accelerated losses, not slowed them.
Financial site The Street reports today on the state of the company’s stock. Most troubling, yesterday Avid received a letter from NASDAQ delisting the company from the stock exchange. As of today, trading of AVID was halted on NASDAQ. (This doesn’t mean you can’t still trade AVID stock; you have to do it via the Over-the-Counter market.)
The really significant issues here are cash flow and earnings – and losing NASDAQ trading will only exacerbate the problem. TheStreet Ratings Team cites issues in this quarter versus same quarter last year including:
Accelerated losses: -$7.55 million to -$17.39 million (year over year)
Negative cash flow: -$1.38 million “net operating cash flow,” a stunning year-over-year 1167.44% drop.
Why Avid (AVID) Is Falling Today [Shawn Ingram, The Street]
They also cite stock under-performance. But with accelerated losses combining with a negative cash flow, it seems AVID in its current state has limited options for a turnaround.
There will certainly be implications for Pro Tools, Sibelius, and other Avid products. These are about more than just the technical quality of the products themselves. Maintaining a successful relationship with customers is dependent on running a successful business, and being able to make the investments in support and development that requires. Earnings represent in part the health of that relationship and the growth of the customer base. This is sometimes easier said than done, which is why many, many music product makers are not publicly-traded companies. But, to state the obvious, Avid can only be successful offering the products it makes if it has a successful business behind them.
Pro Tools, the product, is in many ways healthy. Plug-in makers have successfully supported the AAX plug-in format, the product is still widely used, winning Grammy awards for its users and technical awards for itself.
And the music products industry itself continues to grow; one thing The Street observes is that the loss in earnings at Avid is out of pace with the rest of the electronic products business, and the same could be said in regards to some of Avid’s direct rivals in music.
For that reason, I would expect Pro Tools to have a future, perhaps as an acquisition. But some sort of business change seems coming at Avid the company. For loyal Pro Tools users, that change might be welcome sooner than later.
Avid, Maker of Pro Tools, Now Losing Money Faster and Delisted from NASDAQ - Create Digital Music
Restructuring efforts at Avid maker Pro Tools seem to have accelerated losses, not slowed them.
Financial site The Street reports today on the state of the company’s stock. Most troubling, yesterday Avid received a letter from NASDAQ delisting the company from the stock exchange. As of today, trading of AVID was halted on NASDAQ. (This doesn’t mean you can’t still trade AVID stock; you have to do it via the Over-the-Counter market.)
The really significant issues here are cash flow and earnings – and losing NASDAQ trading will only exacerbate the problem. TheStreet Ratings Team cites issues in this quarter versus same quarter last year including:
Accelerated losses: -$7.55 million to -$17.39 million (year over year)
Negative cash flow: -$1.38 million “net operating cash flow,” a stunning year-over-year 1167.44% drop.
Why Avid (AVID) Is Falling Today [Shawn Ingram, The Street]
They also cite stock under-performance. But with accelerated losses combining with a negative cash flow, it seems AVID in its current state has limited options for a turnaround.
There will certainly be implications for Pro Tools, Sibelius, and other Avid products. These are about more than just the technical quality of the products themselves. Maintaining a successful relationship with customers is dependent on running a successful business, and being able to make the investments in support and development that requires. Earnings represent in part the health of that relationship and the growth of the customer base. This is sometimes easier said than done, which is why many, many music product makers are not publicly-traded companies. But, to state the obvious, Avid can only be successful offering the products it makes if it has a successful business behind them.
Pro Tools, the product, is in many ways healthy. Plug-in makers have successfully supported the AAX plug-in format, the product is still widely used, winning Grammy awards for its users and technical awards for itself.
And the music products industry itself continues to grow; one thing The Street observes is that the loss in earnings at Avid is out of pace with the rest of the electronic products business, and the same could be said in regards to some of Avid’s direct rivals in music.
For that reason, I would expect Pro Tools to have a future, perhaps as an acquisition. But some sort of business change seems coming at Avid the company. For loyal Pro Tools users, that change might be welcome sooner than later.
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