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Non-Tech : Bill Wexler's Dog Pound -- Ignore unavailable to you. Want to Upgrade?

To: Bill Wexler who wrote (1389)	6/17/1999 1:04:00 PM
From: Sid Turtlman	Read Replies (3) \| Respond to of 10293

Bill: Here is one you might want to take a look at: Mechanical Technology (MKTY $23.25). It has about 10.8 million shares outstanding, and is in the midst of a rights offering to add another 800,000 shares. The $250 million market cap pre rights offering considerably understates the real market cap. MKTY runs a tiny, money losing instrument business that is worth about nothing. The entire market cap reflects MKTY's 34% ownership of a private company, Plug Power, which is working on small fuel cells for people to put in their homes and generate their own electricity. So you could say that buying MKTY here, you are really paying $735 million ($250/.34) for Plug Power, but that is still understating the implied market cap. Earlier this year Plug Power formed a joint venture with its neighbor down the street, GE, to market and service its fuel cells, in which Plug Power owns only 25%. PP will make the fuel cells and sell them to the joint venture, which will market them. The cost targets that GE requires are so low that there is unlikely, IMO, to be any profit margin for Plug Power at the transfer price to the JV. So if there actually turn out to be any profits to be had, they will most likely all be in the JV. In other words, $735 million for Plug Power only buys you 25% of the potential profits, implying a cap of close to $3 billion on the whole idea. And it is a really dumb idea. In this post I explain why, IMO, the cost targets won't be met, virtually no one will buy the product even if they are, and, even if I am wrong on those two points, the product is not very proprietary and margins will be minimal.: Message 10147472 My target on the stock, over a period of a few years for people to realize I am right, is zero, or close to it. The main short term risks to the bearish case are two: 1) Plug Power itself is rumored to be close to going public, which might cause people to buy MKTY if they think the deal will be hot, and 2) Since PEM fuel cells are being considered for cars, and since Ballard is already in bed with a number of car makers, it is plausible that some other car maker, also wanting to appear "green" so they can sell more low mileage SUV's, will announce some development project with Plug Power. Nothing will come of it in the long run, but there would be a pop should it happen.

To: Bill Wexler who wrote (1389)	6/17/1999 3:58:00 PM
From: Enam Luf	Respond to of 10293

In my quest to find promising net companies that are not grossly overvalued I think I found a a great long-term play, MYSW (MySoftware Company). Definitely worth a look. Great new management has recently returned the company to profitable growth, and their new web business (1st online customer prospecting biz) is picking up speed quickly. They have a very profitable operating model (the best online margins I've seen due to the revenue sharing deals they cut with marketing data providers) and have been making all the right moves to position themselves in the industry (deals with Intuit, Symantec, ZDNet and others). The company is still tiny ($75 million cap) and unknown, and has a low float, which is tightly held. The last 5 consecutive quaters they have beaten expectations and I'm guessing they will again this quarter. If their online business hits the mark, there could be 300% or more upside appreciation potential, if not, they have a profitable and growing software business adding fundamental support (which I feel limits the downside on the stock to about 30%). I researched the company thoroughly and know the management team pretty well now. I am betting they can pull it off. I would be interested to hear any thoughts/comments/opinions.. -Enam