R.D.,
Thanks for the clarification. Saved me from having to go look up that stuff myself ;~}
Even if SONE is paid by the customer, it seems to me that we could be getting some revenue from processing their transactions recognized in the 2Q, from the way the press release is worded. Of course, there is no way for us to know how many customers came online with S1 during this time, so trying to come up with revenue numbers is a guessing game. Given the merger, it will probably be Q2 '00 before we see a reliable EPS trend. This is why I've been trading on TA recently; the fundamentals are too murky -- though generally positive -- right now, so that is all we have to go on. And so far, it's been working, to my amazement.
I'm gambling (on TA) that this downtrend takes a breather at least for a week, and that SONE will run up to the low 40s by earnings day, at which point I will hedge. I expect a major market correction before SONE shows a profit, though I also expect it to rebound mightily. At the moment, unhedged and long Edify.
I've noticed that Edify and SONE sometimes trade out of phase with each other. Today was one such day. Just when I thought the discount due to uncertainty regarding the merger's completion was starting to fade, SONE gains nine times what EDFY does, and the arbitrage opportunity presents itself once more. With two months to go before the merger is finalized and with the recent news from the FTC, I find this a bit surprising and don't expect it to last.
If SONE has a good day 8/3/99, Edify should have an even better one, IMHO. But perhaps big news, such as the nearby rollout of the E-Citi portal site, will be a bigger stimulus. And better timed than the most recent S1 release.
In short, barring a market melt down (a good possibility, IMHO) this may be one of the best buying opprtunities you will see in Edify. How's that for going out on a limb? And no, I'm not trying to influence anybody. All anybodys are encouraged to think for themselves, whatever they think of my thoughts!
Cheers, Tuck |
