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Technology Stocks : Commerce One Inc - (CMRC)

CMRC 4.400

-0.2%

1:40 PM EST

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To: Logain Ablar who wrote (1913)	2/7/2002 2:14:37 PM
From: John Pitera	Read Replies (1) of 1938

Hi Tim, I asked another investor in CMRC to give me some additional perspective on CMRC. Interestingly he mentioned the SEBL Forbes coverstory, just as you mentioned to me a couple of weeks ago. I've got it opened on my desk and am half way through it. here is his take. JP ------------- That is why I suggested reading the SEBL article. What they discovered in Feb 2001 was that sales were cratering. They took steps to cut their business costs from $4B to $2.6B. This action by businesses cratered all software companies during 2001. CMRC was too slow to see this and cut their expenses. SEBL now says they see a rebound during the last 2-3 months. Hoffman said he sees more corporate budget money in 2002. CMRC was also negatively impacted by timing of its new software release which had been discussed for 1/2 year. Companies are typically reluctant to commit to an old product when a new product is on the horizon. The first and second quarter 2002 sales should give an indication of whether they have a viable product to sell. I agree that an economic rebound is imperative to enable sales to increase. I am wondering where the transaction revenues have gone. Perhaps the public exchanges are not paying it until they are profitable. Saw COVISINT say they expect to be profitable in 2Q2002. Last year Hoffman said he did not see much increase in transaction revenue until perhaps 2Q2002. If they are successful in cutting expenses, which should be acomplished this quarter, since they said they have essentially scaled back to 1950 people, their target, then they should have adequate funds through end of 2002. By that time let's hope the recovery arrives and sales have improved and transaction revenue begins to flow in a meaningful way.

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