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Strategies & Market Trends : Shorting stocks: Broken stocks - Analysis -- Ignore unavailable to you. Want to Upgrade?

To: lindend who wrote (2435)	8/20/1999 3:50:00 PM
From: Q.	Read Replies (2) \| Respond to of 2506

re. TLTG, they filed a 10Q yesterday, which shows some developments on the balance sheet. Previous quarter they had $172 k of cash, $53 k of A/R, and $111 k of shareholders equity This quarter, these figures grew to $958 k, $466 k, and $7.4 M. I phoned the CFO, who has the same last name as the CEO, to get some explanations. The guy did not impress me as being on top of things. In April they issued a lot of shares: 2 M shares to another company, Antra Holdings, which trades thinly on the BB for $4 under the symbol RECD. At that time, it traded for $3. In return, RECD issued them 2 M shares. Through this gimmick, they increased biggest thing is that they inflated the shareholders equity tremendously by $6 M. Without this, there's no way that they could have gotten the shareholders equity up high enough for AMEX to be interested, I would gues.. Antra's business appears to be trying to sell music on the internet. I haven't looked at it. There was also a $1 M private placement by selling stock at $4, which accounts for the increase in cash. Another development is that TLTG set up an internet portal. The CFO told me that hits are now around 1/2 M per month The primary business for the co. seems to be reselling IP bandwidth from OzEmail for commercial customers to use for telephony. The CFO couldn't explain to me how this works at all. He said the customer are not retail. It seems to me that the product being sold is essentially a commodity bandwidth thing, similar to reselling long distance service, which is what the CEO used to do in a previous business. That sort of reselling became a very low-margin business. The one thing that worries me most about the idea of shorting the stock is this, from a news release earlier this month: Preliminary revenue figures show that the company will do approximately $1,000,000 for the month of July. "This one-month figure nearly doubles all revenues for the first half of the year I have no position in the stock.