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Strategies & Market Trends : Mr. Pink's Picks: selected event-driven value investments -- Ignore unavailable to you. Want to Upgrade?

To: Mr. Pink who wrote (11975)	11/8/1999 9:29:00 AM
From: TRIIBoy	Respond to of 18998

TRIIBoy issues a "Run For The Hills The Cattle Are Dying" on NTOP. Latest Herb Greenberg column reveals that the 10-K has a warning about lower than expected earnings for NTOP. Also countries are starting to outlaw NTOP's business. This news combined with the new shares coming out in the offering will cause NTOP to halve itself. But the main thrust is IDTC misleads investors. And remember where NTOP came from. These are not good people. Here is the NTOP part: One other thing for Net2Phone fans: Don't miss the new risk in the risk factor section of Net2Phone's secondary offering. It says that some countries in Asia and the Mideast are blocking its PC2Phone services. "These blockages have caused service interruptions that may cause us to earn as much as $250,000 less (admittedly a drop in the bucket) in PC2Phone revenue in the first quarter," the company said. "There can be no assurance that there will not be future interruptions in these and other foreign countries or that we will be able to return to the level of service we had in each of these countries prior to any interruptions." The company also notes that one of its competitors, iBasis, recently disclosed that it had received a letter from the Israeli Minister of Communications requesting that it cease and desist terminating international calls over the Internet in Israel. "These actions and other similar actions in foreign countries may adversely affect our continuing ability to offer services in these and other countries, causing us to lose customers and revenue." Such a brutal world.

To: Mr. Pink who wrote (11975)	11/8/1999 9:31:00 AM
From: TRIIBoy	Read Replies (1) \| Respond to of 18998

TRIIBoy reiterates his "Run for the Hills the Cattle Are Dying" on IDTC. The company is misleading investors. Their 10-K earnings is different from their press release. This company has trouble with honesty and straightforwardness. Short with impunity. What IDT Didn't Tell Investors When It Reported Earnings By Herb Greenberg Senior Columnist 11/8/99 6:30 AM ET When IDT (IDTC:Nasdaq) reported its earnings three weeks ago, an item here pointed out how screwy they were and how IDT was trying to get investors to look here when they should really be looking there. Then, a week ago, the company delayed filing its 10-K annual report with the SEC, suggesting that something was amiss. The company, which wound up filing its 10-K late last Thursday in conjunction with a secondary offering by Net2Phone (NTOP:Nasdaq), had blamed the delay on its rapid growth (IDT controls Net2Phone). Now, with the filing late last Thursday of the 10-K, it appears that "rapid growth" was a euphemism for "we're having talks with our auditors." Turns out that what the company reported in its earnings release to Wall Street just three weeks ago was quite different from what it reported in its 10-K. And that's before taking into account some questionable balance-sheet items, which weren't included in the earnings release. (That's why it's wise to always compare the quarterly and annual numbers a company reports in its earnings release, which usually aren't audited, with the audited numbers in its 10-K. That's especially true for a company like IDT, which has a history of questionable related party transactions.) While revenues for the quarter were the same, quite a few line items in the 10-K income statements had been changed. For the fourth quarter, for example, total costs and expenses were almost $1.2 million higher in the 10-K than the company had originally reported in its earnings release. And the provision for income taxes for the quarter was $2 million higher in the 10-K than it was in the earnings release last month. For some reason, the company also reduced by about $2 million the amount of debt it originally claimed to have paid off. Bottom line: Instead of losing 15 cents per share for the quarter, as the original earnings release stated, the company lost 18 cents, per the 10-K. And that's before an extraordinary item that hadn't been disclosed in the earnings release, which brought the actual loss per share for the quarter to 96 cents. In the case of the year, rather than reporting a profit of 11 cents, it would have been more like 9 cents. And that's before adding in that extraordinary item. But that's also before taking into account how the allowance for doubtful accounts as a percentage of receivables fell to 6.7% from 14%, despite a 178% rise in receivables. That's important because this allowance is a discretionary item that is a direct hit to income. Had the allowance stayed at 14%, the company would have reported around $8.2 million less in pretax income, which would have translated into a 15 cent per share loss for the year, rather than the 11 cent gain it reported.