An excerpt from Briefing.com that might be of interest. Obviously this is an oversimplified rationale for the price movements of the various stocks discussed, but I thought the comments about the need for Y2k companies to prove to the street they have expaninding post-2000 operations was worth noting. I hope the people at TAVA take this to heart.
Dave
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Y2K Update: Good news, bad news, and no news today:
Good news: Data Dimensions (DDIM) 15 1/2 +1 5/8 beats earnings estimates and reports strong growth in their Y2K business. Also signs off on acquisition of ST Labs ($13 million in revenue last year; cost DDIM $10 million in stock), a provider of testing software for PCs. Especially reassuring is the statement that DDIM's non-Y2K revenues would have been $20 million, or 42% of revenue if they had owned ST Labs all last year. The result: Stock goes up today, as company grows and is acting on post-2000 strategy.
Bad news: Accelr8 Technology (ACLY) 4 3/4 -1 1/4 Warns of loss, because flow of Y2K revenue is dropping off. Although company has a VMS-to-other migration business for post-year-2000 work, it is likely that Compaq will be addressing that issue in a big way. Where does that leave ACLR for post-2000 work? No answer is bad news, the stock is off sharply.
In the No News department, Alydaar, (ALYD), 14 5/8 -3/8 reports sharp increase in revenue to $9.6 million (up 350%) for Q2 , with earnings of $0.16 a share. Only problem is, the company set this level of revenue expectation months ago (CEO Gruder once said to expect $50 million in revenue for 1998; at this pace they will only hit $40 million). These high expectations are already in the stock price and ALYD needs to exceed them to drive it higher. But no real progress on a post-2000 plan. Some intriguing items however, from ALYD's conference call: 1) Gruder showed genuine alarm that people aren't fixing their Y2K problems. Stated the FAA refuses to fix code that even IBM says is broken (does this mean don't travel on 1/1/2000?). 2) Gruder also stated that any company which says EURO is their post-2000 plan is "lying." EURO currency conversion was often given as the post 2000 business for most of the Y2K companies (example, Peritus, PTUS). 3) Also stated hope that Europe will be the great revenue flow real soon. (Yeah, right. If US "flood gate" hasn't opened, why should Europe's? Entrepreneurs are always optimistic, but investors are usually better off being skeptical.)
The moral of today's story: More than anything else, Y2K companies need to get their post-2000 plans in place, and maintain a strong Y2K revenue growth curve, before the market will reward them. DDIM is doing it, was rewarded. ACLY is failing on both counts, was trashed. ALYD, treading water on revenue expectations, but with no clear other plans, is stalled, and starting down.
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