When I was at Financial World Magazine, we would do a list of the ten worst managed companies in America. The cycle was about once a year. To make the list, a company had to do a lot wrong compared to the rest of the stock market and its peer group. The financial results would have to be very poor, and companies in industries that were down across the board were usually not included. For this tech list, a number of financial sources were consulted along with research from Wall Street and sources like ValueLine, Morningstar, and Investor's Business Daily.
We have already examined IDT Corp. (NYSE:IDT) at some length, but the company bears revisiting. A two year chart of IDT and Nasdaq is pretty awful for shareholders in the telecom company. IDT is down over 40% while the NASDAQ index is up almost 20%.
IDT has managed to show an operating loss each of the last three fiscal years (7/31) and in the two fiscal quarters after that (10/31/05 and 1/31/06).
As the company website says, "in 1990, IDT set out to shake up the telecommunications industry". The company did pioneer VOIP and built the Net2Phone business before Skype or Vonage were even dreams. Then, the world passed IDT by. If the management had not been asleep at the switch, the company would be worth several times its current market cap of $1.1 billion.
IDT vs. Nasdaq 2-yr Chart
Douglas A. McIntyre is the former Editor-in-Chief and Publisher of Financial World Magazine. He was also the president of Switchboard.com when it was the 10th most visited website in the world according to MediaMetrix. He has been chief executive of On2 Technologies, Inc. and FutureSource, LLC and has served on the boards of TheStreet.com and Edgar Online. He does not own securities in companies he writes about. McIntyre can be reached at firstname.lastname@example.org.