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Technology Stocks : CDCO - CidCo Incorporated
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To: Elroy who wrote (140)7/10/1998 1:55:00 AM
From: Steve   of 204
 
If you like cash in the bank go buy a CD. A corporation with cash in the bank uses the cash to pay fixed costs not covered by contribution margins. Sure the cash gives the corporation some time to try to refigure what they are doing, but management has promised before and look what has happened. This stock has gone from over $40 to $3. Publicly traded corporations should be using the cash to invest in their business that enhances shareholder value. Obviously the business that CIDCO is in doesn't enhance shareholder value. What kind of ROE will cash get you?

Something is wrong here and I don't profess to know what. The market took the stock from $40 to $3, not me. The market speaks when it trounces a stock. Look, I am interested in hearing managements recovery plan. And I'll tell you one thing too, it is going to use some of the nice safe cash.

The stock goes up one day. That doesn't say alot. I am not saying the company is going out of business tomorrow. It could be years. It depends on how management is able to formulate a recovery plan and use the cash wisely along with execution. Putting money in this company's stock is not investing, it is speculating.

Maybe another company will buy-out CDCO. I don't know. I hope you make some good profits off CDCO.
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