CSG Systems (CSGS) Billing Support Software Message Board

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Technology Stocks : CSG Systems (CSGS) Billing Support Software

CSGS 76.55

-0.2%

10:36 AM EST

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To: llwk7051@aol.com who wrote (88)	7/26/1999 11:44:00 PM
From: double-plus-good	of 135

Re: the various ongoing questions concerning revenue growth per subscriber and percentage growth in number of subscribers. My information comes from the conference call, the 10k and an analyst report. The strongest selling point for the stock IMO is that their margins are likely to continue to increase while their number of subscribers billed appears set to expand at a steady pace. The total possible rev. per sub. is estimated to be around $14. That is the revenue that would be received if all the services offered by csg were employed by the cable operator. CSG spends considerably on R&D to expand the suite of services that can be made available. Their costs are relatively fixed and their infrastructure and software are scalable to serve approx. 60% more accounts than presently served. They are targeting CSO's which provide a range of services over and above reg. cable service. They sound confident of maintaining a steady back-log of accounts to be converted. Over the next two quarters they expect to add/convert 750k accounts per quarter. IMO there are several factors which have combined to submarine the stock price. First among them is the "accounting research report" put out by Tice and the Prudent Bear Fund. The available data shows a relatively low number of shares shorted, but I believe this stock has been targeted by a couple of players for a short play. I haven't seen said report, but I would guess their target is in the balance sheet item -- Unbilled Receivables. This has increased each of the last three quarters...from 2.6M to 4.5M to 8m. FWIW i also find this to be of concern. If this column shows continued growth on this scale I will be gone. Second big reason for the continued underperformance is the uncertainty surrounding the open access issue. If the SF council approves open access csg could well fall through the support range of 23-25. I would be an avid buyer at those levels; i don't believe the fcc will allow the issue to be turned into a litmus test of popular opinion on the "bogey ma bell" reasserting control over all our lives. The cable broadband platform is in relative infancy and despite att throwing its immense weight behind it, it is impossible to rule on an anti-competitive practice that has not even yet reached any kind of critical mass. FCC will rule for the cable operators to conduct business on their network as they see fit -- until they really are an anti-competitive force. 5 years at least IMO. Third major reason for share price weakness -- the acknowledgement in the conf. call that management is thinking acquisition. having only recently succeeded in reducing indebtedness to a more acceptable level, the company appears poised to make an aquisition relatively soon. uncertainty in the market and potential acquisition makes folks nervous. my few 2 cents FWIW long and holding ++good

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