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Technology Stocks : eMachines (Nasdaq: EEEE) going public!
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To: EACarl who wrote (57)1/6/2001 8:51:22 AM
From: RockyBalboa  Read Replies (1) of 122
 
I understand that... but in a bear scenario where money losing tech stocks are a hatred, you will find stocks with even lower P/C rations, simply check out PLRX or even IMPV.

Many of the stocks will vanish on the OTCBB or OTC market if they get not snapped up quickly.

I selected my tax loss selling candidates by hand and by proprietary share distribution measures and IMPV, PLRX as well as EEEE didn't make the cut. The one I took in was PLRX and this is quite a turd in new yer trading behaviour.

I see TOTAL liabilities covered by accounts rec and inventory, with $222 million in CASH net of all else


EA, that is a big fallacy. Perhaps, AR and inventory cover liabilities, but in many failed companies you see that this does not pan out.
The least thing one has to do is to discount and write off smaller or bigger part of the inventory (old PCs noone will by at cost,....)
and AR (in this environment, weak companies are prone to bargaining, ie. strong companies have billing & cash-in "power" while weakers companies have not)

That's what I did within my calculus. Financial institutions do this sort of stress test in a more sophisticated formula but basically it is done the same way.
The goal is to find out whether the company will survive valuation shocks like those ones I applied.
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