Datastream Systems, Inc. (Nasdaq: DSTM) Message Board

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Technology Stocks : Datastream Systems, Inc. (Nasdaq: DSTM)

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To: Shane M who wrote (692)	2/1/2000 11:39:00 PM
From: Wright Sullivan	Read Replies (1) of 721

Shane- Appreciate your couple posts (here & Buffettology) a while back. I, too, have been quite busy. I listened to the cc today and came away quite impressed. In a nutshell, we have two companies, iProcure (let's call that IPRO) and Datastream (DSTM). DSTM (without IPRO) sells for $19 and has earnings of $0.90 (again, without IPRO losses). P/E is around 20. License revenues are growing again. International sales have picked up again. Services (consulting) business was a bit slow due to Y2K but should pick up again. Consulting is lower margin, so no big deal. DSTM is a reasonably priced stock, IMO (I'm still talking "DSTM" without IPRO). IPRO comes free when you buy DSTM. It is losing $0.70/share, but that comes with the territory of any growing B2B ecommerce company. This isn't the same as buy.com, where losses are on each sale and are expected to continue indefinitely. Today IPRO mgt made a heck of a good case that they start to make money on a new customer before the first year is over. Losses will continue because they expect to double spend-through revenues every quarter, and up-front costs are significant. This I can understand and is growth that I am willing to pay for. What is IPRO worth separate from DSTM? That's the billion dollar question. They just might be sitting on a goldmine, with "annuity" income as far as the eye can see. And if not, the worst case I see is that we have a reasonably priced software company that earns nearly a buck a share, which is blowing their earnings on a B2B longshot for two or three years. As always, I'll be interested in your ideas. -Wright

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