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Technology Stocks : Bitwise(BTWS) -- Ignore unavailable to you. Want to Upgrade?

To: Lucky888 who wrote (138)	12/21/1999 11:03:00 PM
From: Bob Duncan	Read Replies (1) \| Respond to of 166

Agree lucky, Im holding the short for a bit. Not covering as soon this time. What do you think of JWEB. Im wondering how high they'll push it before it tanks. bob

To: Lucky888 who wrote (138)	12/23/1999 1:04:00 PM
From: Sir Auric Goldfinger	Read Replies (2) \| Respond to of 166

Ha ha: "IF YOU NEED MORE evidence that what's driving this overheated bull market is how much "buzz" a company can generate, consider the case of Bitwise Designs (BTWS) ? one of the top performing stocks this year. Shares of the document-imaging company, which closed today at $18.50, are up an astounding 1,668% since January. What makes those gains even more impressive is that just seven months ago, the small upstate New York company's shares were trading below a dollar. The stock was in danger of being delisted from the Nasdaq Small-Cap Market, and the cash-starved company defaulted last summer on a $1.2 million bank loan. A group of investors came to Bitwise's rescue, providing the company with $2 million in private financing to keep the operation a float. Given all that, Bitwise doesn't sound like the kind of stock investors would flock to. But that's before you consider the company's major public relations offensive to tout its new product ? software that authenticates and time-stamps electronic documents like e-mails, faxes and computer files. For the past three months, Bitwise has issued a flurry of press releases trumpeting its AuthentiDate.com system, which lets users time-stamp documents over the Web. The New York public relations firm doing Bitwise's bidding ? Neale-May & Partners ? has sent around video news releases on AuthentiDate.com to some 800 television newsrooms. The final piece of the puzzle in Bitwise's unlikely resurrection was a Dec. 9 press release, noting that AuthentiDate.com system is compatible with ? you guessed it ? the Linux computer operating system. The mere mention of Linux sent Bitwise's stock shooting into the stratosphere. The stock peaked on Dec. 10, when it hit an intraday high of $22.75. But unlike other small companies that have tried to hitch themselves to the Linux bandwagon, Bitwise's stock has remained strong and is proving to be more than some one-day wonder. But is the Bitwise run-up really built on something more lasting than public relations hype? Well, there's no doubt that AuthentiDate.com is a promising technology. Just this week, the Chicago Board of Education announced that it intends to incorporate the technology into its record-keeping system. Bitwise has applied for a patent on AuthentiDate.com, but company officials acknowledge that competitors are probably already at work developing rival technologies. The problem is, Bitwise is no fledgling start-up. The company has been around for 14 years, yet since going public in 1992 it hasn't posted a profit. Meanwhile, revenues have declined from $53 million in 1997 to $17 million this year, after the company sold-off two low-performing divisions. Over that three-year stretch, Bitwise has rung-up $10.8 million in losses. The company's stock usually trades in a range between $2 to $5 a share, but it often trades for as low as $1. Bitwise also has run into trouble peddling its previous bread-and-butter product ? an electronic imaging system called DocStar, which scans paper documents onto disks and computer hard drives. A recent Securities & Exchange Commission filing from the company says the "demand and market acceptance for the DocStar imaging system remains subject to a high level of uncertainty." James Hartke, the lone analyst who follows the company, is convinced the new technology will result in a turnaround in Bitwise profitability. Hartke, director of research at the investment firm First Providence Financial Group, says he sees the company's stock soaring to $50. "They've done a great job getting publicity," says Hartke, who notes he's got nothing to gain in touting Bitwise because he owns no stock. But his firm, First Providence, is one of the more active market makers in Bitwise's stock. Any increase in trading volume in the shares means more money for Hartke's employer. Market makers earn their fees on the spread, or difference, between the bid and ask price for a Nasdaq stock. While John Botti, the company's 35-year-old chief executive and president, seems a bit stunned by the stock's rapid rise, he thinks the gains are sustainable. "I think we're all pretty excited about it...but it's been climbing for a while now." Botti says now that the company's authentication system is accessible over the Web, the number of potential users is limitless. He says the investors who have recently found his company are real believers in its new product. But a more practical reason investors may be holding onto Bitwise's stock is the speculation that Botti and other company officials are looking to sell to the highest bidder. (Corporate insiders at Bitwise own 21% of the outstanding stock.) Botti won't comment on these rumors, which make for a popular discussion item on the various Internet message boards devoted to Bitwise's stock. However, one thing is certain: Bitwise is now on the mergers & acquistion radar screen for the first time in its 14-year history." smartmoney.com