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Pastimes : Clown-Free Zone... sorry, no clowns allowed
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To: Nathan who wrote (44671)12/6/2000 5:30:16 PM
From: pater tenebrarum  Read Replies (2) of 436258
 
well, having reviewed their income statement and balance sheet i can detect nothing that really stands out as potentially worrisome...increases in receivables and inventories are in line with revenue and earnings growth, and there's quite a bit of cash in the bank.

i think the worries about CMVT center on two things:
1. their tax status...they enjoy special treatment stemming from Israeli tax incentives where parts of their ops. are situated. a reassessment of this situation by the IRS would likely lead to future profits being severely curtailed, as they pay very little tax right now.
2. their customers...many wireless operators are on the endangered species list , same as other telco ventures. there may be problems with both payment of already delivered equipment (a recent rumor) as well as with orders going forward, as there is currently almost no financing available for less then goliath sized enterprises.

as for the options, you should check if the call premiums went up at the same time...if so, i'd take the reduction in put premiums as a sign that the market makers expect the stock to rise, not to fall. indeed, shrinking put premiums are normally a warning sign for shorts. guess we'll know soon though...
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