Milestone Systems Admits IPO Plan Lie
By John Honovich, Published Feb 27, 2015, 12:00am ESTNow wholly owned by Canon, Milestone's CEO admitted that they lied about not planning an IPO in 2014, as we reported at the time.
The Claim
To IPVM in 2014, Milestone said, "There are no plans for this right now" and "We continually assess our options for the future of the business."
At the company's 2014 event, they made a big show of not planning an IPO, declaring:
“We’re not preparing for an IPO this week, in two weeks or two months. An IPO is not on our plate at this time.”
and:
"Milestone CEO Lars Thinggaard said going public is something Milestone may do and it “will be great if it ever happens,” but that the company “had not decided to do that.”
The Admission
Now at the 2015 event, Milestone came clean:
"Although [Milestone's CEO] couldn’t share insights about the initial public offering (IPO) that Milestone had been planning prior to Canon’s purchase of the company last year, Thinggaard on Tuesday did discuss their thought process and how they arrived at the decision that partnering with Canon would result in a better outcome than going public."
Milestone CEO's excuse:
“There is a lot of legal confidentiality to these processes as you know, so I could not go out and confirm anything.”
No Comment Instead of Deception
So instead of simply saying 'No comment' or 'We don't comment on rumors', etc., he decided to manipulate and deceive.
That was Milestone's choice. They could have went the 'no comment' route, which would have been truthful, but they saw the short-term business benefit of deceiving their partners, customers, and the community.
Be Skeptical About Canon 'Independence'
Now, Milestone wants you to believe them about the next critical company issue - remaining 'independent'.
Indeed, at the company's 2015 event, they continued to hammer home that Milestone will be independent, despite being wholly owned by Canon and despite Canon's 'plan' to acquire Axis.
When the day comes that Canon, as 100% owner, decides to cross-sell / combine Axis and Milestone (which Canon would have to be incompetent not to eventually do), surely Milestone's CEO will have another excuse or perhaps will be retired, enjoying the good life, leaving that to a new person to spin.
4 reports cite this report:
Comments (17)
Just typical corporate speak...Axis announced at their Kick Off event just 2 weeks before the Canon announcement that they were Definitely NOT for sale...
Corp.management believes this type of talk will keep employees and customers from bolting.
Although I am not condoning lying, it may be slightly more complicated than you portray, for a couple of reasons.
1) prior to the 'lie' there were numerous reports of an IPO in the works, apparently leaked one way or another, by someone with knowledge.
2) the 'lie' was an effort to discredit this leak, because of the perceived negative impact to the process itself.
Still a lie but not simply a gratuitous one.
'No comment' is not much of an option here. Because it is similar to the case where a court room defendant, trying to avoid perjury, is asked the following:
- Did you kill your husband in Dallas? Heavans no, I've never even been there!
- Then maybe in Memphis? Absolutely not!
- But what about Los Angeles? I would like to take the 5th.
Point being that when you have truthfully denied an IPO several times in the past, to change your answer suddenly to "No comment" is as good as a confirmation.
Furthermore, as brutal as it might sound, as CEO his loyalty is to the shareholders first. I think that most people understand this is the way it works sometimes, and are unlikely to condemn him for it.
As for your main point about trusting him that Milestone will remain independent, I think that you should believe it as far as it makes sense, but no further.
And in this case he is not even the one who is making the decision...
Its just business, not deception..
I think John is being a bit harsh here, opinions such as this do not help the industry, I wouldnt mind reading a more positive spin on things like this, it often seems negative/bashing for the sake of creating an article to spurring a thread or reaction in comments (which may be done just to increase search rankings etc)
I have to agree with you here John. Its too common today to dismiss deception, little white lies that only walk a grey line, that kind of thing.
You are either truthful or you are not. Milestone could have done the right thing and said nothing about it (no comment, etc) - rather they chose to mislead - and that eats away at a company, or person's credibility.
But then again, that really depends on what your meaning of the word 'is' is. Right?
Just because little lies are "acceptable" to some, it doesn't mean it's right.