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To: Victor Lazlo who wrote (104762)	6/8/2000 9:03:00 AM
From: H James Morris	Respond to of 164684

Victor, it appears the recovery of MicroStrategy (Mstr) has to do with the rumor Mstr has secured funding. This what Mstr had to say back when this accounting mess first started. >WASHINGTON - MicroStrategy Inc <MSTR.O> reported yesterday that its borrowing could have been limited as early as last summer had it used the accounting standards it is now applying. Lets give credit to this analyst, who put a buy on Mstr when it was down to 19. . New York, May 30 (Bloomberg) -- The Securities and Exchange Commission is still investigating how MicroStrategy Inc. accounts for its revenue. That didn't stop First Security Van Kasper analyst Robert Tholemeier from initiating coverage of the stock with a ``buy'' rating. MicroStrategy slid 80 percent in the past two months after the maker of data-delivery software said it would change the way it records sales and restate its financial results. The restatement erased reported profits for 1998 and 1999. Tholemeier said the lack of profit will make it easier for the company to post big jumps in earnings and revenue in coming quarters. ``The company now has a much lower bar to hurdle in order to achieve aggressive growth rates,'' said Tholemeier in a note to clients. Tholemeier, who sees the stock trading at 75 in 12 months, said his forecast of 53.4 percent revenue growth this year is conservative ``and we expect the company to beat these expectations.'' Shares of MicroStrategy rose 1 1/16 to 19. The company is the defendant in at least a dozen shareholder lawsuits alleging it set out to inflate its share price by issuing misleading earnings statements. The Wall Street Journal also reported that federal prosecutors are monitoring the SEC's probe to see if separate criminal actions may be warranted. ``There is a lot of risk, no question,'' Tholemeier told Bloomberg News. ``You have to weight that (in the stock price), but you don't halt trading in the stock.'' Strategy.com Unit The company's Strategy.com unit, which allows subscribers to customize news, weather and financial information via pager, e- mail or cellular telephone, also makes the stock attractive, he said. While the unit is expected to report losses of $59 million this year and $90 million next year, forcing MicroStrategy to raise funds from outside the company, Tholemeier said if the Strategy.com business succeeds it should be ``stunningly profitable,'' he said. ``The core business is enough to make it a buy,'' he said. ``For investors willing to take the risk, Strategy.com is a compelling business.'' He estimates the unit will receive 75 percent of its revenue from advertising and 25 percent from subscriptions. Charging a fee of $10 a month, the company needs just 75,000 subscribers to reach Tholemeier's $36 million revenue target for next year. Tholemeier follows eight stocks for First Security Van Kasper, including Oracle Corp., Brio Technology Inc. and Sybase Inc. A portfolio of the stocks he covers has gained almost 12 percent this year. The Nasdaq Composite Index, which includes all eight stocks Tholemeier covers, has fallen 18.9 percent. The best-performing stock in the group, Canadian-based Cognos Inc., has gained 53 percent this year. Tholemeier has a ``buy'' recommendation on the company, which makes software that helps employees transfer information over internal corporate networks. MicroStrategy is the worst performing stock in the group. Tholemeier is one of eight analysts who rate the stock a ``buy,'' while three analysts rate it ``hold.'' Tholemeier joined First Security Van Kasper in March after almost three years at First Albany Corp. First Security Van Kasper was formed after Utah-based First Security Corp. purchased San Francisco investment bank Van Kasper in September 1998 to expand its investment banking and personal finance products. May/30/2000 16:17 ET