Roger's 1998 Short Picks Message Board

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Strategies & Market Trends : Roger's 1998 Short Picks

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To: Roger A. Babb who wrote (2490)	2/8/1998 2:32:00 PM
From: Rajiv	Read Replies (1) of 18691

Roger and all, Take a look at MMCN. MMCN makes network processors. Cisco is a major customer. Sales to Japanese customers (Hitachi and Mitsui) accounts for 30+% of revenues. MMCN is not a development stage company (at least it does not claim to be one ) - it has been making miniscule profits for quite some time. Last quarter revenues were 7.6 million Net income : $639k ( more than half of which was contributed by interest income from the money invested from the IPO proceeds). eps : $0.02 For the year 1997. eps of $0.04 on revenues of 22 million. The market cap is astronomical compared to its revenues. It has 28+ million shares outstanding (excluding 5+ million exercisable options). At the current price of 19 its p/s ratio is 25+. Even if it manages to grow at a high rate, it is overvalued by several orders of magnitude. 25 million shares are in the lockup period which ends in the last week of April. The current float is 4 million shares. This should create a lot of selling pressure (its daily volume is not very high - around 100k). Disclaimer : I am obviously short MMCN Any comments? Regards Rajiv

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