C-Cube Message Board - Msg: 1459774

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Technology Stocks : C-Cube

CUBE 35.84

+1.4%

Dec 24 12:59 PM EST

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To: DiViT who wrote (16085)	5/23/1997 12:13:00 AM
From: Gary A. Mullennix	of 50808

I hope. However, in a call yesterday with Cube's CFO, he reiterated the need to be conservative (whatever that means now) and he told us (my broker and me) that what he is using and telling analysts on earnings is 2nd qtr .20, 3rd, .21 and 4th slightly better at .26. That makes 1997 an earnings year of 1.07. I figure that the first quarter was not really .41 as they carried earnings over from the mid december cut off. And, with VCD going south because of competition and perhaps softened demand, maybe the argument could be supported of a 1997 earnings year that actually looked more like .85 to .90 cents. For a company whose management has little credibility now, it is hard to see an earnings multiple above 12 until things get proven. A stock price of $10 to $12 seems easily likely. I think the stock will continue to float down especially without any good news on sales and margins or design wins. On the other hand, I have heard a rumor the the "kodak" chip (records) was tested at Optibase and found to be very clean showing only 3 bugs. Compared to the Pentium II which supposedly had 256 (an odd number). So maybe there will be a future for those able to wait. Waiting is easy if one can trust the fundamentals and the management. That is the real stock valuation problem now I think.

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