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Technology Stocks : Zitel-ZITL What's Happening -- Ignore unavailable to you. Want to Upgrade?

To: Rajiv who wrote (18009)	7/20/1999 10:47:00 AM
From: Marconi	Read Replies (2) \| Respond to of 18263

Hello Rajiv: Quick take. Partial conversion by the convertible holders after the end of the quarter and unusually prompt reporting by Zitel this year. Smacks of timely warning--gives Zitel managament the footing--we disclosed it promptly. My guess is convert holders may have been short in the trickle down market the last several months, bought a 100K+ pop Friday to draw interest from the daytraders. Daytraders took the story heavy on Monday with 5M+ shares traded-- about 100 times recent volumes. Daytrader frenzy an opportunistic window to cover for a tidy 100=% flip on the convertible risklessly. Another episode of this may be in the offing with the remainder of the convertible. With ZITL burning $2M in cash per quarter yet, and an additional $2M jump in accounts payable, with accounts payable exceeding accounts receivable, ZITL is perniciously weak on cash. If Datametrics turns the corner pennies are not going to be sufficient. Zitel management remains beholden to the convertible holders for existence. The favor may be returned. Looks like the daytraders will be the ones contributing a few $M to the ongoing debacle. Volume will have to fall back to normal of under 100K sh/day as will the stock price fall. A sleepy, dull environment is needed to turn this kind of trick. This was kind of a new trick. Caught me by surprise but the above scenario seems to fit. Thoughts otherwise? Best regards, m