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Technology Stocks : CustomTracks Corporation (CUST) -- Ignore unavailable to you. Want to Upgrade?

To: Art M who wrote (1699)	7/27/1999 5:24:00 PM
From: Neil_L	Read Replies (1) \| Respond to of 2514

Heres the whole write-up...for all of those long on CUST, good luck...while it may look like it has strength in this market volatility, don't confuse manipulation with the fact that this POS has absolutely nothing good going for it (if you don't count the hypesters). Briefing.com: Custom Tracks (CUST) 45 1/2 unch: Caveat emptor. That's the warning to any investor that is thinking about an investment in CUST, or indeed in any company like it. Custom Tracks, which will soon change its name to ZixIt Corporation (after previously changed its name from Amtech), sports a market cap of $700 mln -- not bad considering that it has no revenues. In fact, it only recently got around to developing a business plan. CUST concerns us because there are many of the classic warning signs. First, they have no revenues and no product to evaluate, reminding us of some past nightmares such as GKI, COPY, and IMON. You don't have to have profits and in some cases you don't need revenues to warrant a healthy valuation, but CUST doesn't have a product! Yes, they have claims about a future product, but who pays $700 mln for promises from a stranger? Second, this is a company that changed business plans in midstream more than once. While not a disqualifying factor, it is a red flag. CUST was previously going into the market for customizable CDs. They dropped that plan and opted for their current plan -- software for secure transactions and email. A company that floats from one plan to the next without clear competence in any field raises another flag. Third, we see wild revenue estimates. Here we are reminded of such companies as Xybernaut (XYBR), whose huge market for wearable computers has never come to pass. CUST claims that the market for their $1.00/month email security product is 10 to 50 mln accounts. All that for a product that does not yet exist! It could happen, but again, how can you possibly evaluate such wild forecasts before the product is released? Another flag. Finally, there is the complete lack of major Wall St brokerage firm coverage but the occasional plug from firms you have never heard of. CUST was recently talked up by Otis Bradley of Gilford Securities. Like you, we had never heard of him, so we did a quick Internet search. The last we found of him was in January 1997 when he was plugging an obscure Hong Kong company called Leading Edge Packing (LEPI-OTC BB). Bradley said that LEPI could earn $1.40/share in the year ended March 1999; instead it was delisted in April 1999. Final red flag. Once again, CUST might hold the breakthrough Internet security technology that warrants a valuation of $700 mln or more. But to bet on it would be to ignore the rapidly accumulating warning signs. And if all that wasn't enough, Barron's Alan Abelson gave it a plug just over a week ago -- that can't be good. - GJ Neil.