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Technology Stocks : Legacy Storage Systems Inter. Inc-VAST 1500 Gig
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To: zsolt fischer who wrote (6)9/4/1996 9:04:00 AM
From: Frederic Borgatta   of 64
 
Do you like throwing your money away? Do you plan on wallpapering your house with worthless shares? Why would you want to pick up 10K more shares if LEG falls to $.20? If the fundamentals aren't there at today's price ($.35) why would $.20 be a buy point? LEG's management, in my view, is playing games with investors. The principle message in their annual report is a financial one (the 10:1 consolidation) but nothing on what they're doing to sell their storage systems. Fourteen systems sold since March is pathetic. While total revenues doubled, Tecmar contributing something like 60% of the increase, the cost of goods sold rises with sales. Net income will increase only with substantially increased revenue. Even after the goodwill writedown, LEG lost more money than last year. Like you, I averaged down somewhat (a stupid move), but I refuse to put one more cent into this company until they demonstrate that people are buying their products. If the industry leaders drop prices again, LEG will be out of the game because the cost of selling these systems is virtually fixed. Someone will buy them (and if so at what miserable price?) or they'll go into bankruptcy. Anyways, like you, I will vote against the consolidation.
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