Avid delisted from NASDAQ

[Scott Witthaus]

[TImothy Auld] “Enough major monetary players have enough invested in Avid that it is not about to go away. It just may come back under another name.”

No, it won’t go away, but certainly has a chance to be marginalized as a niche product for long form and film folks…which is a nice niche to have for some other company….BMD? hmmm

Scott Witthaus
Senior Editor/Post Production Supervisor
1708 Inc./Editorial
Professor, VCU Brandcenter

[Timothy Auld]

OK, now that’s funny! How fondly I remember the good old days when my Avid system would seize up (usually on a weekend or a holiday) and I would spend forever on the phone waiting for my system to get a “remote blessing.” Not to mention the incessant arrival of new cards and the never ending EOL notices.

Tim

[Craig Seeman]

[Scott Witthaus] “but certainly has a chance to be marginalized as a niche product for long form and film folks”

One of two things would have to happen at some point of course.
Currently that niche isn’t profitable for Avid (based on the last time they reported).
So either some entity will know how to make that niche profitable or they’re going to expand their reach.
Of course the third possibility is nothing will change and eventually they may be another CMX.

While not profitable they are also virtually debt free which makes them a good purchase for somebody. Otherwise they can “risk” some infusion which will step up the R&D in some area or another.

[Ben Mullins]

What effect, if any, do you think this will have on the software they make?

[Craig Seeman]

Obviously completely speculative but I mentioned one scenario in another thread.
That would be putting in R&D for better integration of ISIS with Adobe and maybe Apple.
Over time that might mean less resources for Media Composer.
Personally I think increasing ISIS sales is more important than Media Composer is for their bottom line.
I know others feel otherwise…
…but my response is…
Avid is going to HAVE TO change something to increase sales of their high revenue generating products.

I’d love to hear other scenarios about what might change rather than just hearing “that won’t change” as that leads to a dead end for Avid and that I don’t think will happen.

The problem is, the longer they take to find a way to expand sales, the more time competitors have to develop alternatives.

[Ben Mullins]

Thanks Craig, amidst the uncertainly within the NLE market it’s interesting to see where Media Composer might go. Like you say, pure speculation, but I always wondered why some aspects of it just never seemed to really develop. Not that I don’t like MC, in fact there are some excellent features, but things like Marquee, Title Tool, and Avid FX feel truly 1980’s. Not sure how other MC users feel about this but for a company that can balance it’s books so well (at least it’s cash-flow) you’d think they’d have the resources to develop MC a little more rapidly. I guess MC isn’t their top priority.

[Craig Seeman]

[Ben Mullins] “but for a company that can balance it’s books so well (at least it’s cash-flow) you’d think they’d have the resources to develop MC a little more rapidly. I guess MC isn’t their top priority.”

Started a new thread because there seems to be some new issue on cash flow and income (not good) being reported. I consider that a separate issue worth discussing.

[Bradley Jones]

This is not good for Avid, getting delisted may cause a tidal wave of investors to suddenly want their money back and Avid may not be able to pay all their debts. If that happens, they would have to declare bankruptcy. Not all companies that are delisted fail, but a large portion do. The one sure thing is that Avid will no longer be able to raise large amounts of capital without the stock market and ergo not be able to invest in software development. This is not a good thing, loosing access to large amounts of investment capital never is no matter how you spin it.

[Craig Seeman]

[Bradley Jones] “Avid may not be able to pay all their debts. If that happens, they would have to declare bankruptcy. “

Avid has virtually no debt so they’re in an unusual situation. I keep thinking they’re going to use this to find an angel to give them badly needed R&D money as well as an investor who can provide management skills.

[Craig Seeman]

Forbes: Avid Delisting A Potential Shot To The Heart Of The Music Business

https://www.forbes.com/sites/bobbyowsinski/2014/02/27/major-changes-around-the-corner-for-music-as-avid-delists/

Ironically, Avid is today being traded Over The Counter and has had it’s best showing in years. That could be just bargain hunters looking for a deal, and they could be very well be gone tomorrow, but then again it could very well mean a new birth of sorts.

My own hunch is that some are sensing they’re in the hunt for capital.

And

A company like this has no business being public in the first place as it’s growth will be capped by the market size sooner or later. A public company is more beholden to its stockholders than its customers, especially when things go bad, which is a bad recipe when it comes to the entertainment industry.

Since they’re not in a position to take themselves private, I think the delisting might be the next best opportunity for them to regain control if someone gives them the financial shot in the arm.