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Strategies & Market Trends : MDA - Market Direction Analysis

SPY 689.10

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Jan 23 4:00 PM EST

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To: American Spirit who wrote (79985)	7/11/2001 5:02:26 PM
From: Zeev Hed	Read Replies (2) of 99985

AS, I think that the market is taking into account that SCNT's burn rate (at least right now) is close to $33 MM/quarter or so (not taking into account th $57 MM write off in the last quarter and some $47 MM write off in the prior quarter). The trend simply does not look good, in the last three Q's the top line has gone, from $102 MM in Sep. 2000, to $79 in Dec. 2000, to $27 MM in March 2001. At the recent revenues rate, they have essentially no operating margins and their SG&A of around $32 MM is pure outlays. The $100MM in cash will be sufficient for another two quarters (post the June quarter, where I assume conditions have not improved yet, and thus at least another $3 Mm was "burned"). By that time they will have no cash left, unless they can by some miracle double their quarterly sales. I do not think it is such a secure investment. Zeev

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