Zitel - Inept management or deliberate fraud? Message Board

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Technology Stocks : Zitel - Inept management or deliberate fraud?

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To: Captain Jack who wrote (5)	5/17/1997 11:54:00 PM
From: Bill Wexler	of 67

I'm afraid I don't share your optimism about Zitel's core business. Not only has it been going to hell in a handbasket (check out the last few 10-Qs), but it never was a great business to begin with. The stock has basically going nowhere for years until Emerald Research started promoting it.. Right now I'm not sure I would even pay a buck a share for Zitel's core business. I can think of much better ways to invest the money. Therefore, we can only assume that investors are willing to pay $20 a share because Zitel happened to make a 35% equity investment in Matridigm. In other words these same investors are paying nearly a billion dollars (by proxy) for a little startup which has so far failed to deliver on every promise, and whose CEO quit under suspicious circumstances. Why is Matridigm's 5 million dollar investment worth a third of a billion overnight? And if I ran a venture capital firm and I really believed in this Y2K stuff, why wouldn't I simply make an investment directly in Matridigm instead of buying Zitel's worthless shares?

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