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Technology Stocks : U.S. Digital Communications (USDI)
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To: BillRacer1 who wrote (108)5/5/1998 11:20:00 PM
From: Phil Jacobson  Read Replies (1) of 308
 
Asking for a guess on this runup is like asking where a roulette wheel will land. We're either:

a) in the midst of a huge momentum play as part of the same froth that is sending KTEL to daily new highs

b) temporary beneficiaries of a massive scam meant to enrich certain shareholders of a nearly bankrupt company and the only question left is who will be caught holding the bag?

c) lucky finders of a true diamond in the rough.

When I first bought USDI I thought this stock fell under "c". Given everything else that's happened (and not happened) I'm starting to think it ain't "c".

This runup has happened in stages. A double at the beginning of April, also unaccompanied by and news or information, then another double this week. A BB stock can be manipulated by it's market maker quite easily and investors like us take it from there and start the mo-mo part. Before you know it, the large shareholders have sold and the thing collapses.

I'm not trying to be alarmist, just warning of the dangers of BB stocks whose last auditors quit because they thought the company would no longer be a going concern, who have virtually no revenue or cash flow, negative stockholder equity, and accounts payable in excess of the book value of all assets. All of this is laid out quite well in their last 10K report.

Phil
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