Amazon.com, priceline.com, Premier Parks, IDT vs. IDT and More

A Greenberg State of Mind

Amazoned: Amazon.com (AMZN) pulls, or attempts to pull, another trick out of its hip pocket with yet one more "major announcement" -- this time that it'll start selling PC software (oh, wow) and that it's acquiring a tool catalog (watch out, Home Depot (HD) and Sears (S)!). All I could think of after reading the press release was, "How're they gonna make any money by shipping a 500-pound table saw for $4.95 with an offer of free pickup if you decide you don't want it?" And why is the press getting suckered in by Amazon's every-other-week "major announcement expected" announcements?

And why are they reporting every new offering by priceline.com (PCLN) and not other retailers? And what's with priceline.com's new grocery auction service? I never quite could get into bidding for airline tickets, hotel rooms or telephone service. Now, bidding for zucchini? Hello! By the time you're finished clicking and bidding, especially with a 56K modem, and especially with their limited selection, you could've gone to the store and back -- even in New Jersey, where you bag your own groceries! And as long as my A&P (GAP) keeps doling out those 15-bucks-off-per-$100-order coupons (seriously, for weeks now!), I'll be going back for more (yes, and smile while I bag. How they make any money is beyond me, but I'm all for grocery stores giving away food for free).

Roller Coaster Tycoon: When Premier Parks (PKS) made its debut here in August, short-sellers were suggesting that the company's third quarter would be a disappointment because of an early-in-the-season boom in season ticket sales, which would steal from late-in-the-season sales. At the time, the company said it was confident it would meet or beat Wall Street estimates. Well, when it reported late Monday, its earnings before interest, taxes, depreciation and amortization, or EBITDA, beat forecasts, but its earnings per share were light, as was its revenue, depending on which analyst you talk to. "At the end of the day, this is just a horrible business," opines one short-seller, who also calls it a "wealth-destroying business," because based on his calculations its return on capital is lower than cost of capital. The earnings press release, by the way, was a convoluted mess. I counted no fewer than 15 parenthetical explanations (excluding, including, actual, etc.) throughout the release. (What, are they taking lessons from me?! This is the king of parenthetically punctuated columns.)

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Newellization: That's what Newell Rubbermaid (NWL) calls the integration process all of its acquired companies go through. An item here yesterday focused on Newell, but also mentioned Tyco (TYC), prompting reader William Hill to write, "Your 'cutesy' reporting on Tyco is becoming a bit redundant. Try sticking to the facts and being objective -- it might add to your credability [sic]." Well, spelling "credibility" right might improve yours with me, William, and in case you didn't notice the item in question was about Newell, not Tyco.

And Will Cutbert writes, "Just like all journalists, you lie. I wonder if you have children? Most of us know it take nine months. But you blast Newell after seven months [of owning Rubbermaid]. It takes two years or did you forget to read these remarks. Nice guy you are. Who do you know holding 11 million shares short." Nobody I know is rich enough to be short 11 million shares. The point of the item was that Newell's Rubbermaid-related charges keep rising beyond even the company's forecasts, which suggests Rubbermaid is in a heck of a lot worse trouble than even Newell expected. Can't wait to see the spin control Newell, which never did return my call or respond to the article, uses during meetings in New York this week with analysts.

Straight up: An item here last September on Vertical Group, a New Jersey venture capital firm, noted how it was having success investing in med-tech companies that were being acquired. Chalk up another one from the list mentioned in that story: Innovasive Devices (IDEA), which agreed Monday to be sold to Johnson & Johnson (JNJ) for $85 million in stock. (See, I can write something positive.)

We interrupt this program for the ultimate in IDT insanity: Heard from Robin Owen, whose San Jose public relations firm, the Hoffman Agency, represents Integrated Device Technology (IDTI). She writes that her "IDT's products are memories and embedded processors and other semiconductor products for networking and telecom systems -- they have been in business in Silicon Valley for almost 20 years. There's often some confusion between my IDT and the IDT (IDTC) you've recently been writing about. And, the confusion causes my IDT even more problems when the other IDT is doing things that might be perceived as negative.

"Anyway, is there something appropriate that I can ask journalists, such as yourself, to do that might eliminate some of the mix-up? Specifically [can you] note that you aren't discussing Integrated Device Technology, or [can you] spell out the name of the other IDT? Is there something you can suggest that would not be burdensome to you and would help my IDT avoid the negative publicity of the other IDT?"

Your IDT can change its name. Reminds me of when I used to write about California Micro Devices (CAMD), whose saga was detailed in this column and investors would confuse it with California Microwave. Sad fact is that our IDT is officially IDT Corp. Such is life in a world where investors click first and ask questions later.

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