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Technology Stocks : ObjectShare (OBJS)

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To: Jeff Hallman who wrote (86)	8/8/1997 11:50:00 AM
From: Raging Bull	of 185

I agree completely with your analysis of the software market for Java. Therefore I am very relieved that ParcPlace did not drop thier Smalltalk line as the name change and developer layoffs indicated. With the VSE line they announced that they would no longer enchange the product. That is very different from making no announcement and making minor product enhancements to make the software compatable with new versions of DBMS's and operating systems (maintenance). I think that the real opportunity for ParcPlace to significantly increase share value in the short run is to focus on consulting and training. Their current product line and OO experience positions them to increase consulting and training revenues significantly. I believe that this alone is enough to make them profitable with the new organization structure that is lean on sales, admin, and developers. I am sorry to see the Smalltalk developer cuts as deep as they were however since that hurts their long-term license and revenue potential. Consultants and developers I talk to in this field tell me that Smalltalk developers make better Java developers than C++ developer do since OO design expertise is much more valuable and difficult to master than language syntax. As I stated in my earlier note I think the reduction of developer exertise also hurts prospects for selling the company. Overall I am very pleased with the direction the company is heading. If they focus on training and consulting and keep headcount lean, I think it might be POSSIBLE to see positive quarterly operating earnings up to 10 cent per share range within the next three quarters or about $1.2 million in earnings. Think of what that could do for the stock price if annual earnings reached 40 cents per share in an industry with an average PE of 32. We could be double digit share prices! This company has a very strong balance sheet too with a cash value net of liabilities very close to the current sales price. It will take quite some time with their current headcount to use up their cash resources. That gives them time to build up their consulting and training business. This company has left me nothing tangable to count so all I can do now is hope. Still its better than facing certain doom. I will hold my shares.

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