Roger's 1997 Short Picks Message Board

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Strategies & Market Trends : Roger's 1997 Short Picks

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To: Pancho Villa who wrote (7041)	11/15/1997 10:59:00 AM
From: Roger A. Babb	Read Replies (3) of 9285

Pancho & Shoe, re CTXS 10q CTXS received 75 million from MSFT in May of 1997 which they are recognizing over time, including $3,750,000 this quarter. They have not yet received any of the $100 million potential royalty from MSFT on Hydra. There is some funny accounting going on with the deferred revenues and taxes that makes it hard for me to understand the earnings this quarter. As CFO of two very conservative private companies, I have a very simple way of measuring the cash profit of my companies as follows: profit = dividends + change_in_cash + change_in_investments I ignore everything else because such things as receivables, payables, and inventories can be manipulated. Note that debt is included in cash as a negative number. The cash profit for CTXS last quarter was a negative $8 million. I love to short companies which are reporting large earnings while cash is declining as they almost always have a bad surprise in their future. But I should note that professional analysts are very high on CTXS with strong buy ratings and predictions of $100+ price, so I am very much in the minority here.

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