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Technology Stocks : FNCM Finet.Com
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To: mod who wrote (390)3/12/1999 2:22:00 PM
From: Hamiltonian  Read Replies (1) of 2420
 
Hi Mod

This is quite an upbeat report from Dillon Read. I listened to their conference call (all 58 mins of it). I am long a few thousand shares. Since your post covers most of the positive aspects of the presentation I will try to point out a few not so positive items to bring some balance here.

The company is undergoing restructuring and they have hired what seems to be some top-notch people. I'm impressed by that. On their balance sheet they lost $17 million over the last 9 months I think and they are closing offices and consolidating. Some of the losses were attributed to acquisitions.

It seems as if in the past 18 months they made some really bad deals because they were carrying over $100 million of liabilities. My question about that was how the heck a company with a revenue stream of about $4 million per quarter accumulate such enormous liabilities.

They seem to be working on reducing this. Also their expenses were enormous and was eating into their profitability. The CFO and CEO expect to gradually reduce expenses and increase revenues...In answer to a question about profitability they said they should show positive earnings within the next 4 quarters. So thats a good sign and we need to see how they perform in that regard.

Another area of concern is the large number of shares issued (about 58 million). This coupled with the recent private placement will act to temper any stock price increase unless there is explosive revenue growth.

Dont get me wrong, I think this company has excellent potential and they seem to have the right focus and in the long run they should do well. But its important to have some balance.

Hamiltonian
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