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Technology Stocks : Source Media SRCM
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To: Ellis Rudman who wrote (78)4/20/1998 9:57:00 AM
From: Smilodon   of 3015
 
There are probably better places to put your money.

I appluad your success in this stock. Source has done a good job of not building any expectations for immediate success of their virtual modem. So nothing catastrophic happens in the near future.

What I do think happens is:
Source does not get the cost reductions and growth in the telephone business they forecast when raising the debt. Prudential downgrades to neutral/hold citing valuation and wanting to see progress in the telephone business and carriage agreements for the virtual modem. The stock occasionally spikes up on rumors of agreements in the works. Source may even get a few agreements. These agreements never yield any real revenues. The set-top box makers start building cable modems into the boxes. The telephone business stabilizes into a slightly profitable, declining revenue business. SRCM files bankruptcy and writes off its entire cable business. The company comes out of bankruptcy as a pure telephone business and becomes a bulletin board stock.

Bottom-line, this is slow death with periods of great hope. I don't know if we have seen the all time high yet. Certainly there will be upward spikes along the decline. You can trade it, but there are probably safer places to trade.

Regards,

Archer

PS: Source reports earnings this week.
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