Forecross Corporation : Y/2000 Message Board

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Technology Stocks : Forecross Corporation : Y/2000

FRXX 0.000400

+100.0%

Mar 7 3:00 PM EST

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To: .com who wrote (62)	10/20/1996 8:08:00 PM
From: Gerald Underwood	of 1654

I have been highly impressed with this company's accomplishments in the last few months. Their contract list is becoming impressive. I believe I saw recently that they had a 5 month backlog of work in the conversion/migration market. The agreement with NCR/AT&T alone when it is finalized could probably keep this company going. Their distributorship with Gardner 2000 who is going to provide sales and service support of their y2k software factory in NY., NJ. area alone is expected by Gardner to bring in 500 mil in next 4 years. If Forecross received the nominal 10% licensing fee for their software in this transaction, this could be worth earnings which could be calculated as follows: $500 mil x 10% = $50 mil / by 4 years = $12.5 mil per year. Take 50% for net profit and 39% tax= net earnings of $3.81 mil annual divided by roughly 10 mil shares out = $.38 per share x 20 p/e multiple= $7.60 stock price on just the one distributorship. Of course one has to be cognizant in running p/e multiples that business at this level may not continue beyond 2000 for any of the y2k solution providers. But, Forecross specializes in the COBOL conversion/migration market which is expected to continue way beyond the y2k solution aspect of it. Many companies spend a fortune on maintenance of old COBOL code and in many cases conversion expense is not that much more than a year's maintenance for the old code. I believe that maintenance expense has been estimated at some $60. bil per year now. This is almost as much as the correction of the y2k date problem will cost. It will no doubt be more cost effective for a lot of companies to convert or migrate their entire data base to a more up to date COBOL or client/server arrangement. Please consider this information for discussion purposes only. It is not intended to be a recomendation for this stock. Please do your own due diligence.

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