Denise:
Some great info on AOL Motley Fool(sorry for length):
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Subject: From what I understand...
Date: Mon, May 11, 1998 21:58 EDT
From: DSVandy
Message-id: <1998051201585300.VAA17675@ladder01.news.aol.com>
It is my understanding that the following events took place at Robinson-Humphrey last Thursday-Friday. Joe Sadler, R-H analyst covering PTEK, has an earnings model, long ago disclosed to PTEK management, with PTEK's quarterly revenues coming in at a certain level. On Thursday morning, Sadler issues an in-house memo to all R-H brokers saying, in effect, that PTEK will be issuing numbers after the close and that he is looking for
revenues at $X million, a figure that is significantly higher than the one produced by his own model (again, the one that has been shown to management). PTEK comes in at $119 million, a figure that exceeds the one in Sadler's earnings model but that is shy of the one put out in his memo. Massive selling ensues at R-H, where most of the selling appeared to occur all day Friday. I am not aware of any downgrade at R-H or any other brokerage.
I am aware of post-earnings comments from two other anaylsts, which I will post after this post. I am unclear as to how the R-H error could have occurred, but I am not aware of PTEK missing the quarter by anyone's estimates. Selling begets selling, and I believe that the confusion wrought by the memo has led to further weakness in the stock price.
As Scott Bleier of Prime Charter commented on PTEK's price weakness today, "sometimes Wall Street just gives you a gift", and recommended the shares.
I find additional comfort in the fact that Harvey Wagner, a seasoned and well respected CFO (formerly of Scientific-Atlanta), after due diligence and lengthy discussions with PTEK's auditors, agreeing to take the post at PTEK just last week.
DSVandy |
