EyeDrMike;
I have read your last post. I must confess that my remarks will be biased. I don't use AOL because access in the NY metro area is almost impossible and it is almost worthless to me, anyway. It is overpriced for what it provides and it can't send E Mail of more than 1 meg. I send large E Mail attachments regularly. It is also very slow.
I never participate in IPOs and usually, never buy stock in a company that is public less than a year. To my chagrin with Netscape and Yahoo. Recently, I relaxed that rule and bought 500 shares of Cell Pathways, Inc., CLPA a bio tech that is supposedly, developing a drug that induces apoptosis into cancer cells but leaves normal cells alone. They were in Phase III clinicals and were to file for FDA approval in March when I bought the stock. Well, Phase III bombed this week. The company is public about 4 mos. I bought at 22 and watched it go to 29 1/2 and then to 9 1/2 the next day. It is now 6 3/8 I expect it to go to 2-3. I even formed a small group of research biologists and biochemists to evaluate of their peer reviews. So far, no peer reviews. So, I'm not exactly in the mood to exude optimism. However, I'm illustrating a point and that is that you can't make a fair evaluation based on forward looking statements for companies with no history. They are just PR.
For instance, we have no balance sheet from Dragon, just a couple of numbers. We have no annual report. What is Dragon's market share? Does anyone know? Does Dragon know? If Dragon is the market leader can it hang onto the lead? It hasn't proven that yet. The field of speech recognition software is really part of the field of artificial intelligence and that is still in its infancy. The most sophisticated software and hardware, combined still only equals a 3 yr. old. Dragon has a long way to go along with its software and it hasn't proven that it has the stamina to survive yet. There are many more questions. Such as, I noticed that this company needs a very high margin, 70% to remain profitable. That is not good. Competition will force that margin down. This software is not Windows or Photoshop.
All this may have nothing to do with how the market treats the stock anyway. However, I remember a company called Bernard Chaus, Inc., CHS that went public in the eighties. It started out at 19 and went to 26 and then a year later it was 6 and then down to 1. My wife worked for the company and everyone wanted stock options. I saw the first annual report and after reading it through, carefully I realized that though, this company had more than 400 million in sales, at the time its book value was only 12 million. Bernie ran it as a subchapter S company until just before he went public. Published on the last page of the report, the real worth of the company was obscured. They issued 100 million shares in that IPO. That's about 8 1/2 cents per share. That sounds more like earnings than book value. The stock has never even earned 8 1/2 cents in any quarter since. My wife was the only person in the company that didn't buy its stock. Bernie was pissed about her refusal to buy his stock too. He was a master con artist who got out with a killing but what about the poor slobs who purchased? Their still here! A little poorer! A note of caution?
PHOTOMAN
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