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Technology Stocks : Data Dimensions
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To: sheldon spivak who wrote (898)4/30/1997 5:26:00 PM
From: Staff   of 4571
 
Sheldon I've been around this game long enough to know that Momentum plays like this have no room for error. The emotion that runs them up can turn on a dime when a company with such high expectations disappoints Wall Street.
It has always been my contention that there are so many high expectations built into this stock.
For the stocks price to maintain this multiple will require that everything o go off without a glitch in the mweeks and months ahead.
The world in my experience isn't that perfect.

My contention is that at current levels, I'm willing to bet the problem is not as large as originally hyped and DDIM's market share is not near what has been projected..
As time passes this company has a big nut to crack to justify its 300 times multiple. It just has to many hurdles in front of it..
I firmly believe that there is absolutely no way this company can afford to come out with a bad earning number.
In reality I would have to agree with Jalali's assessment if all is done by the book. I disagree with Jalali in that I beleive DDIM can ill afford to report such a blemished number.
It would be the kiss of death and they could be committing earning suicide to report a loss at this time of 3 to 5 cents.
DDIM needs to do whatever it can to buy the time and capital to maintain enough credibility to make them a legitimate vendor for the Y2K problem. See todays timly release as evidence of this.
When I say creative accounting, I mean in the sense that they need to create the best picture possible within the legal parameters associated with standard accounting practices.
This does no rule out accellerated write off's of such things as all the development costs accrued to date. This I see as being creative and out of the norm but not illegal per say.
The key will be to see what is expensed and written off in order to ascertain the companies true overall profit picture.

I see the number being a good number but robbing Peter to pay Paul in order to obtain it.

My guess is that this is what the analysts will see through this as they tear the numbers apart.
If they write off everything they can lay their hands on this quarter, they have nothing to fall back on in the weeks and months to come. This I see as the inherent danger in firing all your dry powder at one time.

I expected the company to pull something out of the air to pacify the market. Today's announcement really concerned me in that I looked at it as an act of desperation. Time will tell if my inclinations are justified.
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