Letter to Charter President
The following is a letter I sent to the President of Charter Communications:
"I am a big fan of Charter. I have been following the company for years. Most people follow sports teams, I have been following Charter. To an outsider, it seems easy to fix Charter and make Charter larger than anyone imagined.
I'm going to be honest. I am sending this email with the hopes that I be given a chance to help make Charter everything it should be. I want to work side by side with you, and fix things.Here is a very concise overview of what I notice...
1) Of course the debt. This is the greatest obstacle. Let's get Charter to make insane amounts of money, and the debt will be easy to fix. First we will get Charter running smooth. We improve the efficiency of operations. (I've got plenty of ideas on this). Then we will be able to refinance the outstanding debt. All along we will aggressively pay it off.
2) Company morale. I know alot of Charter employees. They are miserable. Miserable people do not try. Miserable people do not innovate. It takes 2 to 3 miserable people to be as productive as a satisfied employee. How can a miserable sales person convince someone to buy cable? Let's not settle for satisfied employees, lets get and make happy, loyal employees. Whatever Charter is doing reminds me of when I bake. All you get is awful turnovers. Let's clean house, and hire quality people. Lets dedicate ourselves to training those people. Let's ask those people for feedback constantly (similar to 3M, or Edward Jones), and constantly give them feedback. Lets make Charter a place where everyone wants to work. Lets get Charter to be a place where no one wants to leave. I work at a company like that. Lets bring that to Charter. Let's get Charter ranked in Forbes top 100 companies to work for list.
3) Satellite. Satellite is not a problem! Satellite should not even be considered as Cable's competition. Satellite can not offer the bandwidth that cable can. End of story. Your competition should be yourself. Innovate. Make your employees happy, make your shareholders happy. The rest will follow.
4) Innovate. Why hasn't Charter combined TVs and computers yet? Why does VOD suck? Why hasn't VOD put Blockbuster out of business? Why can't I watch a basketball game, click on Kobe Bryant's shoes, and be taken to Amazon to buy those shoes? (Amazon would even pay a premium to be the preferred store). Why isn't this stuff done? Its not money. Let's make some money.
The above are just a few of my ideas. I have many many more. I want to see this happen. I want to make this happen.Hire me on, make me your sidekick. Let's make Charter a top company to work for, and a preferred source of information (TV, internet).
Thank you, and have a great day!"
So he hasn't replied. If anyone thinks any of the above is a good idea, or if anyone has any faith in me then please feel free to email cvogel@chartercom.com and let him know that you read a blog post at http://www.wilgrowinvestments.com/ that you think is a good idea, and that he should contact me...(if you don't refer him to my blog, he probably won't remember who I am.)
Do I think he will contact me? No. According to Bloomberg he owns less than 0.50% of their stock. What incentive does he have to turn them around? Plus, as most of you know, I am just a 25 year old kid. Noone listens to 25 year old kids. But hey, what do i have to lose?
Please send a few emails to Carl. It'll only take you 3 minutes. Feel free to post the email you sent on my comments.
Thanks all,
Greg.
posted by Greg at 1:18 PM
8 Comments:
No, let the company go down. Their services are over-priced already, their selection on VOD is pathetic and the internet they do provide is patchy at best.
Charter is a shit company. They will go down before they head the direction you would like to see them go (my opinion). Another company in another industry (possilby internet providers teaming up w/ websites/verdors) will probably come up with a service you explain in 4.) I guarantee Microsoft has already got blueprints for the requirements of a service like that as well. This is going to be neat when this comes to existance to the general public but very far away. For this to happen you would need the majority of households in America or wherever to have high bandwidth connections which won't be the case until maybe 10-15 years from now and the internet would have to change to support this. This project would have a hefty investment and would have unknown returns. This would open a new medium for advertisment though...
1) why are you credible, you didn't even say your name?
2) Have you heard of a Phoenix? Does everything that falls down have to stay down? What you see as failure, I see as opportunity. You watch the ship go down, I try to think of ways to save the boat.
Here's what I see: I imagine of cities with toll roads. The roads are run down, and sometimes are closed. But someone steps in and cleans the trash off the roads and improves the quality of the service. Charter is the same. They have direct access to our houses and businesses. Satellite does not and can not have this bandwidth. Cable's potential is mesmerizing, if you see opportunity and not pessimism.
I will just ask this? How can you make Charter better? what are they bad at? how would you fix it?
Send an email to Vogel. Refer him to www.wilgrowinvestments.com Maybe he'll call me and it'll give me a break.
What kind of a threat do you see telecommunication companies becoming in the future? Verizon and SBC are currently laying fiber optic cable to the home that has the potential to deliver everything you stated above. Just at the cable companies have moved in on their turf, the phone companies will be moving in on the TV content providers. SBC just signed an agreement with Microsoft to deliver content to consumers. Finally there will be more than one company with a direct line to the customer's home. Great news for consumers. Sounds like Charter must innovate or be left behind. I'm not sure if I made a point or not, but I did type something.
-JR
http://story.news.yahoo.com/news?tmpl=story2&u=/ap/20041118/ap_on_hi_te/sbc_microsoft_tv
JR, excellent post. I wasn't aware of the phone companies doing this. But it only makes sense. Here's my first impression of it. Charter is 18B in debt because thats about how much it cost to lay their infrastructure. It will cost the telecommunications (SBC, ATT, whoever else is left in that field) a comparable amount to get started. But it is DEFINITELY a threat.
The cable companies have first mover advantage. IF they get customers loyal now, AND innovate then it will be hard to get consumers to switch. Plus if they go the premium route, then the telecommunications companies will be unsuccessful when they start a price war, because they will have to pay Billions of more dollars to catch up with the cable company's innovations.
I think that your point is a great one...Cable has a definite threat on the way. If they pulled their heads out of their asses they would have the first mover advantage.
(side note...JR's comments and Joe's comments have been great. That's what this blog is about, developing ideas, and killing boredom. They are helping ideas develop, keep it up!)
Email Vogel, refer him to this blog!
a lot of people thought Kmart was going down when they filed for bankruptcy, now look where they are. No where near the top but far from the bottom, especially when they were at around $1 a share.
If the Charter ship is sinking the put your money where your confidence is....sell short or buy puts.
(or if you bought in the teens and refuse to sell, why haven't you played with puts or calls depending on where you think the stock is going? or why haven't you sold and took advantage of the tax consequences?). If you bought in the teens than Charter is worthless to you now, play with options and make your money back.
But more importantly, if anonymous is so confident in Charter's ship going down, then I challenge you to sell short or buy puts. If you're right you make quite a bit of money.
Charter Communications is a victim of the same sort of shit that went on industry wide - and - perhaps - business wide. A large number of publicly held companies have ripped off their shareholders over the past decade - a result of the 'phony' 90's boom. When it came down to brass tacks - most major '.coms' didn't have the brass and their tacks were actually a cheap tin. But - that didn't stop them from writing the big checks to the cats on top - at the expense of the employees and the shareholders. Have you seen any of the parachutes offered to the criminals who have been removed from the top of such companes as United Airlines, Excite.com (remember them?) - they were given exorbitant sevewrance packages and were actually encouraged to fail! They lied to their respective boards, they lied to their employees and they lied to their shareholders. It's taken this long to see that the trust - once so closely guarded - that those companies once held is gone. Period. Charter has done it's share of shitty business dealings but they have tried to turn the corporate image corner by instituting accountability practices in to the daily operations of the company - something that should have been there all along but - sadly - was not. Now, they toot their horn about how much more control and transparency they offer shareholders - but - DAMN - you swindle me - you're not going to get another chance no matter how many policy changes you make or how many executives you fire. The company is caught in a rut. It's a bad situation and it's not going to change any time soon. The services and products Charter offers are at a par with any other MSO nationwide. They're no better - and they're no worse. they provide advanced services to their customers and their service ratings are right where they should be - but - they will not re-gain the confidence of shareholders until there are MAJOR periods of excellence and DOCUMENTED and CERTIFIED accountability practices. I invested a lot in this company because I had faith in their direction. I see them looking a lot like amoebae under a microscope now trying desperatley to congeal in to a world class force and being torpedoed by the constant financial changes and head office name plate revisions. They still look like they're out of control and until they change their image - they will continue to flounder. Paul Allen - You need to take a serious look at the top spots and do some roster changing. Get the right people on the bus before it goes over the cliff - either that or take the company private and start over.
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