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Strategies & Market Trends : Technical analysis for shorts & longs -- Ignore unavailable to you. Want to Upgrade?

To: Clint E. who wrote (23449)	9/5/1999 10:42:00 PM
From: Johnny Canuck	Respond to of 68479

Clint, I am still short. If I had been able to baby sit it a lot more closely I would have covered at my first target of 63. On a fundamental basis , this stock is still overvalued given its business model, but the quiet period is about over and the hype might take it higher.. I was doing some calculation based on MSFT's market capitalization. MSFT has sales of 17.35 billion with a market capitalization of 490 billion. This gives a capitalization to sales ratio of 27.68. RHAT has a capitalization of 5.58 billion with currently 10 million is sales. If you say conservatively that an investor would wait 3 years to reach the same market cap to sales ratio as MSFT then RHAT has to grow revenues 272 percent per year for the next 3 years. This is not out of the range of possibility, but most holders of the stock right now are momentum investor so one soft quarter would take this down quite a bit.