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Technology Stocks : Log On America, Inc. LOAX -- Ignore unavailable to you. Want to Upgrade?

To: gladman who wrote (273)	9/25/1999 1:30:00 AM
From: Mark L.	Read Replies (3) \| Respond to of 353

Even though I'm not Fundamentals, I'll take the liberty of responding. Our view (the view of LOAX bears) is that there are significant valuation questions and potentially significant honesty questions related to LOAX. Most of us feel quite confident in LOAX as a long-term short (I'd be happy to detail the reasons in another post if you'd like). The near term outlook, however, may be a very different animal. Assuming that management has not already shorted the stock off-shore (a significant assumption), then they have a strong motivation to cash out part of their position come October. When they do, they'd like the stock as high as possible. Thus, there's a decent bet that there'll be another appealing press release prior to when the insiders want to sell (but potentially after the lockup ends). This press release should send the price higher. I don't share the view of other shorts that the stock will collapse after the lockup ends. However, I do believe that a couple of things will occur: the upward volatility will be much smaller since there will be an increasing float and less of a short squeeze effect. And the downward volatility will increase as each normal downward sway in price is accentuated by nervous insiders who want to make sure that they get at least some of their net worth into cash. Thus, your best strategy might be to sell some of your shares now to lock in your profit. Then with the remainder it's probably worth waiting for another press release. When that comes, you should be able to sell higher, perhaps even in the high 20's. Conversely, if the stock starts to deteriorate too much from here, you can always sell the remainder and still have a profit from the whole position. In summary, I have a pretty strong conviction about where the price will be 2 years from now. I haven't a clue where the price will be 2 months from now.

To: gladman who wrote (273)	9/25/1999 5:37:00 PM
From: Fundamentls	Read Replies (2) \| Respond to of 353

If I were long LOAX I'd certainly want to get out fairly soon. Insiders can be released from lockup by the underwriter starting October 18, and many of them will undoubtedly head for the exits. This company has fierce competition, no defensible strategy, a CEO who has little regard for telling the truth in newsreleases, and a whole slew of questionable names on the list of friends who got huge stock options for what appear to have been bogus consulting deals. Read this history on this thread, particularly the two Barrons articles from this summer, and posts by Tim Barmann, who writes for the Providence Journal. Don't let anyone tell you that the lockup is for a year. Yes the shareholders signed a year lockup agreement, but the underwriter can release them after 6 months. Many of the insiders have ties to the underwriter and I have little doubt that ANY third tier underwriter, and especially one with the reputation of Dirks, would be happy to let themselves and their friends out immediately. They'll even let their enemies out, once their friends have found the door, provided they pay a little "faciliation fee". Lockup waivers occur all the time in this business, its one of the tricks used by the pros to steal money (legally) from the general public. Would I sell tomorrow? Maybe, maybe not. I consider LOAX to be a long-term short, but have boxed my short position for the time being because I expect they will release another hyped-up newsrelease that could pop the stock back into the 20s or even as high as 30s Based on the history I do NOT think whatever they announce will stand up to close scrutiny, but that doesn't mean that the stock won't still go up. LOAX needs to keep the price over $15 until they register the shares issued to cyberTours from the acquisition that closed in August. They have to do that by early November and could do it sooner. If the price is lower than $15 on the day those shares are registered, cyberTours can take most of their payment in cash at $15 per share, which would deplete about a quarter of LOAX's remaining cash. LOAX can't afford that, and they are creative enough that I think they'll find a way to keep it over $15 at least until then. But the market is getting wise to their ways, picking apart every press release until they find the hidden nuggets of dirt - which always seem to be there. There's limited downside right now because of that $15 put option, IMO. On the other hand, I don't think the upside is very certain and you'd have to have good timing. I'd rather lock in my profit than get greedy here. MSFT or CSCO is a better stock if you're greedy, IMO. There are far better investments IMO than LOAX, so if I were holding long I'd put in a limit order to sell about $1 above the prior day's closing price and wait 'til it hits, ratcheting it down to about $16 if downwad drift continues. Then I'd reinvest it in a good company that has a long term future, which LOAX doesn't. I might be leaving something on the table (if they pop the price again with trumped-up news). If I wanted to play that risk, I'd set a limit sell order just shy of 20, or if I really wanted to shoot for the moon, maybe 23-24. Personally I wouldn't do either; my general rule of investing is to bias myself long on good companies and short on crummy ones, and go neutral when the short-term outlook differs from the long-term one. So you'd never find me long on this one; if I acquired a portfolio that had long positions in LOAX I would sell them almost immediately. I can't say what the right strategy for you would be, nothing is certain in love, war, or the stock market. If you've really done due diligence and think LOAX is a good investment, you should hold on -- I would never say that I or anyone else has an absolute lock on the truth or the future. But I would say that I have seen relatively few companies where the due diligence is as damning as with this one. The deeper you look, the worser it gets. This stock is so manipulated that there are opportunities to make money both ways. I'm holding my short ammo for the death plunge, which I believe will begin in the next 3-6 weeks. Good investing, Fund