Carnegie Group CGIX (READY FOR A MOVE?) Message Board

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Technology Stocks : Carnegie Group CGIX (READY FOR A MOVE?)

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To: steven Probst who wrote (92)	9/5/1998 12:49:00 AM
From: Sethpop	Read Replies (1) of 110

Book value is really not the necessary floor of value because the balance sheet has deteriorated considerably via their recent acquisition and their negative cash flow from operations. While the 6/30 "book value" is around $3.24/share...the "liquidation value" (a much more appropriate measure for looking at "downside" risk) is about $1.58 at 6/30 (that is cash, cash equivalents, A/R minus all liabilities). This will decline further as the contingent payment for the completion of the acquisition must still be made. Assuming that their operations for the balance of the year are neutral on the liquidation value, then this further payment could reduce liquidation value by another .37 down to $1.21..which would represent a much truer economic "floor" value. It is clear the company and its management do not seem to feel that this price is a great buying opportunity!! If they don't..why should the public???

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