LPasko, I think investors are in a "wait and see" position with ALYD. Here we've got a company that had about $32,000 in income boldly say revenues would be in the millions soon. Well, they were right, but it took longer than expected. At the end of last year they were predicting a jump from $2M to $6-8M. I don't think anyone doubts they will eventually hit those numbers for a quarter, but the real question is can they do it for Q4 as predicted. This is a credibility issue.
Those "veterans" among us in Y2K know that predicting Y2K revenues is virtually impossible given there is absolutely no precedent or model to go by. Every other article you read is about how surprised the pudits are that companies have procrastinated for so long. So just about any projections made several months ago look quite foolish in retrospect.
So, personally, I think ALYD has to just hit $6M to gain credibility. I see no incentive for them to want to go any higher as they (and we) were lucky to get any contracts let alone be profitable in '97. I would just assume start '98 with a bang when it's put up or shut up time for everyone.
But, yes, ALYD did get dozens of Y2K contracts. With the exception of IMRS, I defy anyone to name any Y2K code remediation company that has signed up more big names. Believe me, there will be more big names to come. How do I know? Because billion dollar companies is their target market and their we-do-it-for-you approach is a perfect fit for them.
So, the big question we investors have to decide is, if ALYD does hit the minimum projected figure of $6M, and it they do finally show a profit, say even a penny, what will that do for the stock? I suppose if this were any other sector than Y2K you could take this figure, factor in some growth, and then come up with a number. But this is a Y2K stock and we've seen how volatile they can be. I think it's a safe bet the entire sector will soon come back in favor and then it's just a question for investors which stock you want to be holding since I think they will all go up.
My philosophy on all this is that the next wave of investors will be less "savvy" than the first wave. I expect ALYD's client list to be their main asset in attracting their attention. Yes I think ALYD will diversify enough to continue as a thriving company post 2000, but I really don't think the next wave of investors will really care about that. As we all know, most people just want to make a fast buck by climbing aboard a hot stock. let's just hope that these new investors say "if ALYD is good enough for McDonnell-Douglas then they are good enough for me" (gg).
- Jeff |
