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Technology Stocks : Data Dimensions

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To: Bob Trocchi who wrote (2519)	8/2/1997 9:12:00 AM
From: hasbeen101	of 4571

Bob, What a surprise to find a post on this thread that actually analyses the issues. I think you state the dilemma well. My opinion is that this company was on the brink of insolvency before discovering the Y2K issue, and it will have nothing special to offer in the year 2000 and later. Therefore it's worth the sum of these items: 1. What it can earn in the next 29 months; and 2. What a medium-sized software consulting company with obsolete Cobol skills will be worth in a market that is glutted with those skills (there will definitely be a glut as all of the Y2K projects disband). Unless Ardes 2K surprises us all, that sum is IMHO < $5 per share. The problem is that there may be a lot of "irrational exuberance" between now and the time that the truth becomes obvious, which may be as late as the year 2001. If it takes that long to drop, the annual % return for shorting will not be too impressive, even for investors whose analysis was impeccable. I wanted to play this one by writing out of the money calls, McNabb style. If you do the sums, I think that could make you more dollars than shorting if this stock takes another 2 or 3 years to crater. Unfortunately my broker wan't interested because my account is too small. My two cents worth.

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