From Steve Harmon's news letter re: Data Race
A Caution on this stock....
Data Race--Plug 'N Play:
Perhaps One Of The Hottest Products In Years
______________________________________
By Steve Harmon
Senior Investment Analyst
iworld.com
"Where Wall Street Meets The Web"
[February 13, 1997] You're in Timbuktu with a beat-up laptop, fatigued from
the 15 hour flight and the "soylent green" snack that the airline served.
After fuddling with your hotel telephone jack you wonder how anybody back
in the office--associates or customers--can reach you. The last thing you
want to do is call and give EVERYONE who wishes to contact you for the next
two weeks your hotel number where you can be reached. Impossible anyway.
The solution may be Data Race's (NASDAQ:RACE) new product dubbed "Be There!"
Dialed In Always
With Be There anyone can reach you simply by dialing your business office
number or fax and the data or call FINDS YOU anywhere, all the while it's
transparent to the caller, faxer or sender. As far as they know you're in
the corporate office. Teleworkers may also be reached by officemates just
by dialing the employee's office extension as if he or she were in the
office when they might be half way around the world--doesn't matter; same
extension number, same access, voice, fax, data over one phone line.
Through Data Race's setup (the firm invented the word "telepresence" to
describe it) the call automatically forwards to your home or wherever you are.
So why hasn't Wall Street got the call on Data Race yet?
Waiting For The Swoosh?
DATA RACERACEValuation Estimates
@
netday.iworld.com
now
or Morning Report archive, Feb. 13, 1997
By The Numbers
Our analysis of RACE shows it trading at what we estimate could be 2.6x
calendar 1997 sales at a time when anything resembling hot technology
fetches more than that. What may cause investors some concern and hamper
RACE stock value? losses and sales weakness. For the quarter ending
December 31, 1996 Data Race posted $4.43 million sales, down 33% vs. the
same quarter in the previous year. Meanwhile, December quarter losses
reached $1.32 million vs. a loss of $2.7 million the prior year. Important
point: Losses narrowed while sales didn't reflect its new Be There! product
(it wasn't out yet and was formally announced February 10, 1997).
You Make The Call
Be There! looks to be a truly hot product that could affect not only the 30
million or so telecommuting universe forecasted by the year 2000 but
perhaps even plain vanilla modems. While Data Race doesn't mention
"regular" modem users as its targeted market we think having a "smart"
modem/device/service like Be There! that lets the Internetwork (voice, fax,
data) know where you are just by plugging in to a phone jack could become
part of every modem.
Being first or pioneering new gizmos may not be enough however. It's cash
that matters when introducing a new product. Our analysis shows San
Antonio-based Data Race working capital hovers just north of $3 million and
it recently sold a round of private preferred stock to raise cash for sales
and marketing--which has been lacking. For the race goes not always to the
swift but to those with enough cash to buy the sneakers. We'll see if Wall
Street gets its second wind on this one. |
