Here's is another, IMO, interesting and unbiased opionion that provides more perspective for those trying to sort out the FUD from the reality--a difficult task for sure.
>>>>>>>>>>>>>>>>>>>>>
Subject: Re: Staying Foolish
Date: Sun, Oct 12, 1997 12:35 PM
From: HMAletter
Message-id: <19971012123501.IAA26920@ladder01.news.aol.com>
<<Of course I can't predict the future, and for all I know, SYQT could go to the moon. But for my Foolish dollars, I'm more comfortable going with the ship that's having a successful flight, not the one still on the launching pad.>>
Tony;
I agree with your sentiment regarding the intense speculation going on with Syquest stock right now. The comparisons you suggested regarding the fundamentals comparisons are indeed valid. Revenues, gross margins(losses), earnings (losses), huge differences between the two.
However, I don't believe that Syquest "investors" are too concerned with the above. They obviously don't give any weight to the massive dillution that has already occurred, or the larger dillution ahead of them. Syquest has been riding the last 24 months on the backs of shareholders. I assume that the current group is looking for a major pop such as last week's rise. If one has some "gambling money", what the heck. Great returns in this type of
trading for those with some ice in their veins.
As for those that actually believe in the long-term prospects of the Syquest future, I would wait until the massive dilution has been done. Currently, Syquest has filed for a doubling of the shares authorized. Assuming that they are eventually issued, and the proceeds are used (as they have been so far), for the payment of operating expenses and financing of losses, the shareholders have basically been gifting money to Syquest that hasn't increased
shareholder value at all. The donations have produced a company that can continue to experiment until it gets it right. That's fine, since the company won't be left with massive debt that they would be unlikely to recover from. But my advice is to wait until the damage is done to the shares. Wait for the dilution to run it's course, then evaluate the company and future prospects. Gamblers can use the stock as a 'fix'. Investors should head
your advice. If Syquest is going to recover and become a major player in the market, then they should be worth buying into next year as well. What was that they say about 'as fools rush in'?
Be careful about statements regaring companies still on the "launching" pad. This is frequently where the best prospects can be found. I certainly wouldn't have bought into Iomega in 1994, and 1995 was gambling as well. Remember, Iomega had a "hot" new product that "could" be amazingly successful and profitable. Hardly sounds like a company that was having an "successful flight". Look at Iomega now, not bad.
By the way, anything new on the infamous Iomega/Syquest lawsuit?
Steve Hinchey
Publisher, HMA Strategies
>>>>>>>>>>>>>>>>>>>>> |
