Hi J.M., thanks for the post. I have not forgotten ODSI. We still
own tens of thousands of shares. Just been busy and doing some
research on some other issues. Unfortunately, I missed the CC and I
dont believe they had a replay. One of my associates called the
company and got some new info but we have been trying to coordinate
schedules to call again. Lets go over some of the points. First,
nothing has basically changed from my earlier post from the year
end CC where they discussed 1999 and the write-offs for the fourth
quarter. We saw the write-offs and they were in line with what I
was expecting and I am glad they got this done and restructured for
I truly think they are postured for a very good 1999 and a return to
profitability. Some other tidbits that we have come across that I
think are of interest. SAIC, the private company that they have
the partnership with, is actually rather large. I dont have the
exact number but it is a few billion from what I understand. SAIC will
introduce ODSI into their customer base. Originally, I thought SAIC
was a remarketer of ODSI product but that may not be the exact case.
SAIC, as I mentioned earlier, can purchase a certain percent of ODSI.
I understand they already have over a million shares but cant
accumulate more than 20% of the company. Since SAIC is in this for
the long haul that reduces the tradeable float significantly. Another
point is that SAIC gets warrants (these are not floorless) where they
can pick up 750,000 shares at 8 and another 750,000 at 10 1/2. So
SAIC is expecting an increase in share valuation and will use their
size to leverage ODSI successes. ODSI has a strong cash position and
intends to continue to reduce up to 3 million per quarter out of the
cost structure. What I find truly interesting and I could use some
help from any of the networking hardware folks out there is their new
switch that they had developed for the government and now have
government approval to sell commercially. This high performance
switch is ten times faster than the closest competitor running at
500 gig per second. This to me is astounding. What I have not done
is compare it to Cisco's best and so on. That is why I need a follow
up with the company to ask for those comparisons. ODSI will be
showing these products at Networld/Interop (Las Vegas, March 11-13),
Open Systems 99 (Florida, March 15-16), Gigabit Ethernet Conference
(San Jose, February 16-18), and Comnet 99 (Wash. D.C., January 26-28).
They were just at the RSA Data Security Expo last week. Where does
the stock go from here? My opinion is that it held very well against
the 4Q write-offs. I was actually expecting to add to my position at
3 and change but it traded briefly at 3/4s and was history. In a few
days it has moved up to today's close above 5. 5 is an important
level but ODSI has to have appeal with its restructuring, new products
and a nice chart. The next move is to break through 5 1/2 on big
volume which I actually think it will do this week if not within the
next day or so. Then it runs into resistance between 8 and 9. I will
continue to hold since it has a history of trading higher when there
is a decent environment with positive fundementals but we will have to
take a look when and if we get to nine. All of the above is simply
my best efforts to report the facts and details as objectively as
possible identifying opinion when appropriate. Hope this helps. |
