Merrimac (MRM) anyone else follow 'em Message Board

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Technology Stocks : Merrimac (MRM) anyone else follow 'em

MRM 1.800

-2.2%

Jan 13 3:55 PM EST

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To: Liatris Spicata who wrote (33)	9/19/1997 12:51:00 AM
From: FIFO_kid2	of 110

It is awfully quiet here given MRM's slow and gradual advance which is encouraging. All MRM needs is a blowout quarter and then watch out. Regarding VARL I have thinking of temporarily selling my entire stake based on the fact that it had a slow and gradual decline since its earnings report. I am concerned that Red chip review had raised estimates by 50% to .12 per share and there was an additional dilution this quarter because the convertible bond issue was converted into a quarter of a million additional shares of stock. The good news remains that $400,000 of addtional revenue was booked this quarter from the recent Lucent deal. The bad news is there will another delay in the startup from the joint venture in China until the 1st quarter in 1998. The third quarter of 1997 was supposed to be the first one to see revenues from the joint venture in China. I believe due to the following factors and giving VARL's gross margin of 10% to the Lucent revenue and recent dilution minus addtional savings from interest expense I see VARL will miss the third quarter estimate by a penny. The question is how will the street react to that near miss? I am going to monitor the quarter over quarter growth at MRM to determine if VARL will receive additional revenue to cover this probable shortfall. At best VARL will match estimates given they receive a 20% quarter over quarter revenue increase; that seems awfully aggressive. It could be an excellent opportunity and probably last chance for you to get in VARL.

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