Data Race (NASDAQ: RACE) NEWS! 2 voice/data/fax: ONE LINE! Message Board

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Technology Stocks : Data Race (NASDAQ: RACE) NEWS! 2 voice/data/fax: ONE LINE!

RACE 328.79

-2.2%

1:48 PM EST

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To: WHL who wrote (22715)	8/6/1997 7:41:00 PM
From: WHL	of 33268

Current earnings estimates from Zacks: I think that the 4th Q estimate on RACE from Zack's is a bunch of baloney. The 1998 estimate may or may not be "optimistic". Their estimate assumes about $35M in Be There! sales for fiscal 1998. I had previously assumed $12M. $35M is certainly possible- but we have little to go on in evaluating such an assumption. EPS BEFORE XTRAS & NRI'S ..... 1ST ...... 2ND ...... 3RD ..... 4TH .... FISC YR 97..-0.29A .. -0.27A ... -0.68A ... -0.25E....-1.50E 98 ... NA ....... NA ....... NA ..... NA ........ 0.89E This consists of 2 analysts whose opinions are Fisc Yr 6/97 -$1.45 and -$1.56 (average -$1.50) and Fisc Yr 6/98 $1.10 and $.68 (average $.89). So a $.25 loss for the 4th Q. I can't get to that without a giant leap of the imagination. Crunching the numbers- see my post 22643 exchange2000.com adjusted for 1Q not 4Qs and $1M Be There! sales not $4M per Q. l.) $1,000,000 sales * .30 - the historical gross margin (before SG & A) $1,000,000 sales * .50 - the Be There! estimated gross margin (ie. for the Q $2,000,000 sales...gross margin $800,000.) 2.) Subtract SG & A ($3M for the Q) Estimated loss = $2.2M 3.)Tax rate 0%- see 10K for year ending June 30, 1996. 4.) Divide by 5.0M shares. This gives a loss of $.44 per share. This seems to me to be the best case scenario for the Be There! sales. This means that RACE will not meet estimates (in my opinion) for the 4th Q- barring a miracle. So does that mean that the stock price is going down? Oh contraire! No one should care about this prior quarter- it is irrelevant in this case because it does not reflect current sales conditions. Moreover, there is a definite reason why certain short sellers might want RACE to miss estimates this quarter. Have you ever wondered why certain stocks go straight up even though they report earnings that miss estimates? Doesn't it take a gutsy investor (one who ignores all the "principles" of investing) to buy in such circumstances? Well it is very likely to happen to RACE in about a week. Certain large investors don't like for a stock to sit around while they could be making money by driving it down and then making money again while it goes back up. (BTW: Take a look at the estimates as of September of last year: exchange2000.com Perhaps this is still one of the analysts that follows the stock. If so, it seems that their estimates have dropped somewhat for fiscal 1997. A loss of $.13 to either a loss of $1.45 or a loss of $1.56. Indeed- perhaps this gives us some insight into who would be willing to go short $1M shares on a stock that seems to have so much potential.

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