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Strategies & Market Trends : Shorting stocks: Broken stocks - Analysis

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To: Mama Bear who wrote (1646)	8/15/1998 3:19:00 PM
From: Sword	Read Replies (1) of 2506

SRCM: Taken from their 10-Q: "On October 30, 1997, the Company purchased certain of the electronic publishing assets of Brite for $35.6 million and certain of the assets of VNN, a unit of Tribune Company, for $9.0 million. Recently, a significant portion of the customer contracts purchased in the Brite acquisition have been cancelled or not renewed. As a result, the Company has reviewed the value assigned to the contract rights and certain related intangible assets acquired in the Brite purchase and has found them, along with a pro-rata portion of the related goodwill associated with the Brite acquisition, to be impaired, resulting in a write-off of $25.9 million in the second quarter of 1998." Amazing! They now have about $16 Million in cash for operations and an escrow account with $17 Million from which to make payments on their huge debt until May 1, 1999. At their present burn rate, I estimate they will be out of money and options in 2 quarters. Their book value is already negative. Unless something breaks loose for them, they are toast. Does anyone know when they can do their next convertible? -Sword

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