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Biotech / Medical : Catalytica Energy Systems, Inc. (CESI) -- Ignore unavailable to you. Want to Upgrade?

To: Erik T who wrote (1495)	3/29/2000 3:47:00 PM
From: WTMHouston	Read Replies (1) \| Respond to of 1514

I was half right about: <<Over the last three years, the $10 - $11 range has always been a good buying opportunity in CTAL. However, as I recall, most of the sub $11 prices in the last 12 to 18 months or so have been very short lived -- hours to maybe a few days. This one just looks different especially given Friday's large volume.>> The last line was the part that was not right in hindsight, even though it was accurate at the time. I was also half right about: <<Unless and until XONON news hits and XONON adding something to revenue and earnings becomes a reality, CTAL is not a whole lot more than a commodity stock.>> It was XONON news, just not the kind I expected. Looking back on it, I recall that the original plan was to eventually spin-off CCSI: but, like most of us, I had forgotten about that. I was wrong, because of the memory lapse about the XONON news having to be revenue and earnings related and for the same reason was only half right about the last sentence. Pharmaceuticals is only a commodity business, but CCSI has more value as a spin-off, which gives CTAL more value than just its commodity pharmaceuticals. In my defense, I was mostly, though not completely, right about: <<While they can increase revenue and earnings through expansion, as I recall, those lead time are substantial. Again, as I recall, CTAL has been at or near max capacity for some time so I would not expect substantial growth in revenue and earnings. I will agree that margins may increase some, but not enough to generate enough EPS expansion for this stock to be treated as a growth company anymore.>> If CCSI sells new stock in the IPO, then the only value to CTAL shareholders will be whatever pass through additional value the market gives to CTAL for owning some portion of CCSI. At best, the CTAL market price increase will be substantially less than the market value of CCSI. If CTAL sells some of its stock, and reduces its ownership percentage, then it will likely improve CTAL net because CTAL will be able to pay down debt and avoid the interest expense associated with it. I was half right about: <<If CTAL gets down to $9 or so, which I concede it may not, then I will look seriously again at buying it back.>> If it had gone down to $9, it would have been a good buy, but I rightfully conceded that it might not have done so. In fact, it did not. I was completely right about: <<CTAL has done well with what it has, but, IMO, has not done so well, so far, with what was to come. The "what was to come" is what supported the share price for so long. Until it comes (or comes back), there is not a lot to support the share price.>> So, in balance, I stick by what I said: I was about half right. <g> The wrong part cost me money though. I should have stuck with my gut and bought at $10 1/2. Troy PS - I have not gone back and looked, but was Wyckoff bought by CCSI or by CTAL? I thought it was CTAL, which would mean that the CCSI IPO could have no effect on anything having to do with Wyckoff regardless of whether CTAL retains a controlling interest in CCSI.