Roger,
The following from briefing.com may explain why ZITL shares are holding up--the market's perception of ZITL may be not as negative as we believe the stock's fundamentals to be.
Lyle (I'm actually J*ck K*ng and personally caused the ZITL debacle 'cuz I'm short)
09:25 ET ******
ZITEL CORP. (ZITL) 16 5/8 CLOSED. Considering the earnings news and outlook released last night, the stock of
this Year 2000 software concern is not expected to be slashed too badly at the open, although given the more volatile
market environment that has prevailed lately, anything could happen. According to this information technology concern
posted a 4Q loss of $0.46 a share, including a ten cent charge for the discount associated with debt issued in the previous
quarter, versus a year-ago profit of $0.02 a share. Revenues for the quarter rose 34.6% to $6.26 million, and were
also up 86.7% on a sequential basis. Unfortunately and surprisingly, the company is very disappointed with the slow
emergence of the the Year 2000 market and, accordingly plans to eliminate redundant costs to keep its expense line in
check with its sales. The company is still encouraged for the prospects for growth in this area, although so far this year,
Zitel has posted losses in each of the preceding three quarters as revenues, with the exception of this period, have
also slumped below year-ago levels. The trend in the business has certainly taken a toll on its stock price as this issue
traded as high as $72 7/8 in the past 52 weeks, much of the upward move coming from the revelation that one of
George Soros' investment vehicles had parked some money in Zitel. However, it is a different story today as the
company has failed to deliver on lofty expectations, many which were probably unrealistic, but which helped push the
stock price higher. While the stock is not expected to open significantly lower, it is already trading not too far from its
52-week low. |
