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Technology Stocks : Avid Technology

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To: Yujin Maison who wrote (636)	12/23/1998 9:31:00 AM
From: BMcV	Read Replies (2) of 777

re: 4th Q Over on Yahoo there is some speculation that this quarter might disappoint. The thought is that AVID might have pulled revenues (or pushed costs) from the 4th Q into the 3rd, which would explain the 30 cents reported earnings vs initial guidance of a "marginally profitable" quarter. There never has been a good explaination of the discrepancy and remember they did preannounce on Oct 2, after the quarter ended, when they should have had a pretty good idea how things looked. They may have thought the 4th Q would be very strong -- enough to allow they to skim a bit off the top to help the 3rd Q. I don't know how realistic this is. Deferred revenue is a sticky subject -- one that has gotten lots of software companies in trouble. My guess is that there is some flexibility, but whether or not it is used depends on management. My take on AVID's management is that they wouldn't play games. But did they panic when they saw the stock fall to $12? Estimates according to Zack's are 14 cents -- ie very low. The stock is acting like it expects a preannouncement. I think this could be a good chance to buy for a substantial pop when no preannouncement comes and earnings surprise on the upside. Sold some shares to buy June calls. Might go very wrong, but for such a dominant company, AVID still has a lot of skeptics, which makes for some good opportunities. Here are the Yahoo posts, appreciate any comments: messages.yahoo.com@m2.yahoo.com messages.yahoo.com@m2.yahoo.com

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