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Technology Stocks : SWMCF- Making a comeback this week.
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To: Kent Kuo who wrote (118)7/15/1996 1:24:00 PM
From: Bart Sampson   of 278
 
Kent;

>c. SW reports good earnings for the 2Q (which would be unusual
> because this isn't typically their best time of the year).

Not only is this not prime time for software sales, but SW has been in transition for the past 6 months. Racking up big sales with little or no sales and marketing force (before the Strategic deal) while going through a major restructuring would be a near miracle.

>e. CW has lined someone up to buy SW. Mostly because they
> anticipate SW will either grab more market share or sell major
> copies of its products.

SW has been dragged to every big and medium sized player in the game and been turned down by every one. Buying SW at this point would be an additional burden to other educational software companies that are struggling themselves (ie. there are NO educational software companies strong enough to grow through acquistion right now.) If you really take a look at this situation, there are lots of reasons that any company would want SW:

1) They have a leading edge technology that would cost less to outright purchase rather than develop interally.

2) They have a catalog of good to excellent selling titles for the educational market, and these titles would complement the purchaser's already exisiting catalog.

3) Aquire licenses.

4) Acquire personnel.

And, this is what SW has done:

1) Sold their proprietary technology already.

2) They have a catalog of poor to good selling titles.

3) Have a whole corral of overpriced, underimplemented licensed properties.(Can you say Ripley's anyone? geesh.)

4) Laid off almost all of their personnel during downsizing.

I personally think that this whole buyout thing is a crock. There has to be something of value in the company in order for a buyout to occur, and there just isn't any value at SW right now. They have a few OK titles and a few OK deals in the works, but they also have a fairly big debt for a company of their size and they've screwed a big number of investors already. If there is going to be a buyout, it won't happen because the company has value, that's for sure.

Bart.
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