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Intrinsic Value Asset
Management, Inc.
P.O. Box 2415
Malibu, CA 90265
October 18, 1999
Investments & Finance
By Benjamin Mark Cole
Bicoastal leader
The irrepressible Ken Luskin, chairman of the Intrinsic Value Asset Management money management shop in Malibu, thinks he has another hot one with his investment into Bitstream Inc., a Cambridge, Mass-based computer software company. This week Luskin is set to file a 13-d with the Securities and Exchange Commission, meaning he's bought more than 5 percent of the stock.
Several months back, Luskin bought and correctly called the rise in the Alhambra-based fiber-optic company Ortel Inc. – the stock has run from $6 to $22, and A.G. Edwards & Co. just put out a "buy" recommendation. Luskin's strategy is to find out-of-favor tech companies that have promising technology that has been thwarted, thus disappointing the market. This market does not like disappointments.
Bitstream owns software that allows large IBM or other high-tech printers -think of super color laser printers – to produce four-color fliers, individualized and targeted for consumers. As consumers buy products or services, especially over the Web, they accumulate "profiles" - a record of everything, they’ve bought. Add in their home addresses, incomes, age and other personal data, and you can make some educated guesses about what the consumer may want to buy. Amazon.com does this when it suggests books to buyers, based on past purchases.
Fed into those $500,000 IBM, printers, Bitstream software allows fliers or brochures to be printed that are custom-tailored - a car company can alter text, car model and color, and photos for each consumer targeted.
“An auto company might send me a flier with blueprint and specs, as I am an engineer,” said Charles Ying, Bitstream chairman and CEO, and MIT grad. "They might send the next guy a picture of a convertible sports car."
Worth noting is that Ying lives in Santa Monica, a continent away from Bitstream's Massachusetts offices. "I get 100 e-mails a day," he said. "I am the virtual chairman." He flies back and forth a lot too.
Bitstream went public at $6 a share in October 1996, but hasn't hit any home runs yet and was trading last week in the $2.37-a-share range, and has $1.50 of cash in the bank.
Ying said he expects the company to break even in the current quarter and rise into the black for the first time in the first quarter of 2000.