Someone's going to make a lot of money on this stock during the impending Y2K and Euro Conversion booms or hoaxes. Either the longs or you shorts. And I imagine the winning side will be the one which has researched the issues more carefully.
Thus far, the shorts have been creamed, because they have been consistently wrong. Their luck will not change unless they begin doing better work that that evidenced on the board.
There is so much to say about their under-researched, backward-looking, shamelessly naive analysis. But to summarize briefly: The short side has been violently wrong and has lost money at every turn. Just the facts...
* A year ago, the shorts perceived the 1-3 reverse split as some sort of conspiracy. But the market disagreed with them, the stock shot from 14 to 56, and the longs made a fortune.
* Only one month ago, the shorts perceived the 3-1 split as some sort of conspiracy. But the market disagreed with them, and the stock rose from 16 to 26 (now 23), and the longs are up significantly.
* Unisys-Federal and Deloitte-Touche have signed exclusive agreements to sell Ardes 2K in their respective industries. Hewlett-Packard and Ascent Logic have lesser deals. But the shorts feel that Ardes 2K is some sort of scam, because it was released for direct sales in mid-March yet they have seen no sales reporting in mid-April. The resellers are either hoping to make money with DDI, or they too are part of the conspiracy.
* The shorts perceive no evidence of new consulting contracts or revenues for 1997. Yet in '96, DDI worked with Kaiser-Permanente, Bank of Boston, MCI, Frank Russell, the State of California and the nation of Australia...and dozens of others. Y2K awareness is escalating among the media and Fortune 100 companies. Keane and CHRZ announced earnings Friday up 60-80 percent, largely attributed to Y2K work. Yet the shorts claim the lack of '97 news (two weeks before earnings!) as evidence of a sudden and abject business failure, and some sort of cover-up conspiracy at DDI.
* DDI has operations in Ireland, and relationships with Credit-Suisse and foreign governments. British Y2K was just estimated at $50B by the UK government itself, and Euro conversions will be $100Bs. Or they could be perpetrating a hoax.
* Now this imbecilic backward-looking analysis of cashflow during last year's international expansion and Ardes ramp-up. DDI is still hiring. None of the shorts has offered what they think Q1, or better, Q2 thru 1998 will bring. Wouldn't they want to look ahead in their "analysis"? Oh nevermind, just short it! |
