Thanks for your reply to my post and for the historical review of your postings. However, I'm afraid the only thing you said that I agree with is that this thread can share our disparate views.
If this is the basis for your bearish view on Zitel- Matridigm, I can only say I am greatly relieved.
1. a) You say Matridigm's technology is not groundbreaking. Please reveal your sources. Everyone who has seen it thinks it is. Kevin Schick of Gartner Group thinks it is. I'm aware of his credentials, but not yours. Gee, I wonder who I should believe? b) You state some gobbledygook about limitations. Why don't you reread the Matridigm services description that I referred to in my post.
2. You state that the accuracy being claimed is 99.999% and see this as a problem because it will require some human intervention. Helllooo! Reread the Emerald Research report. The section where it says that Matridigm is the perfect partner to the Y2k body shop companies like VIAS. Nobody has claimed that the machines are going to take over the Y2k problem and solve it for us.
3. You say the service doesn't include compilation and the end product will require further testing. I don't get that from what I read. Where do you get your information???
4. You say there are and would be other competing products and faster rate of conversion is not as significant as accuracy. Is anyone else claiming Matridigm's speed or accuracy? Nope and nope. Really Warren!
Next you attribute no more than $80 million in annual revenues to Matridigm, but starting only in 1998! Warren, I just don't think Esping, Brady, Chiang, Titow, the analysts from Emerald Research that have visited the company and the other heavyweights behind this play agree with you. I sure as hell don't.
You go on to say that the street will apply a PE of 10 and a sales ratio of 2 because of the FLAT EARNINGS label that Wall Street will apply to a company with revenues that will peak and then reduce. That's cool. My conservative scenario is for three fully booked conversion lines, one with Zitel and two with Matridigm. Now applying Emerald Research's (conservative) earning estimates of $13/share per year per conversion line from Matridigm plus let's say the same from Zitel, we get 3 x 13 x 10 = $390 stock price. I may be wrong on this latter point Warren and I am sure you will correct me.
Casey |
