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Strategies & Market Trends : Anthony @ Equity Investigations, Dear Anthony, -- Ignore unavailable to you. Want to Upgrade?

To: labs who wrote (57532)	6/26/2000 11:54:00 AM
From: StockDung	Read Replies (1) \| Respond to of 122087

You've Been SCONed! A Report on Superconductor Technologies In the MOMOmama (momentum) stocks of the new millennium, few stocks have had the incredible run-ups in valuation that Superconductor Technologies Inc. (NASDAQ: SCON) has had. This report will attempt to understand how the price how that run-up occurred and the underlying fundamentals that comprise the company. What we found should have surprised us, but alas, the dynamics that make SCON are common in the high flying Bubbles that make up today's Market. What we found about SCON 1. SCON seems to be asking the now common question of most anemic companies? "If we build a nice web-site will you still look at our fundamentals?" The fundamentals of SCON are terrible. 2. It just ain't happening. We are better damn it!!!!! That's what's Sony's more costly BetaMax said. SCON marginal performance with far greater cash out lay does, not seem to be garnering the MASSIVE market adoption "expected" and needed to justify SCONs incredibly rich Market Capitalization. 3. Market adoption. Though SCON has put our PRs for years talking about "Testing" with 9 of the TOP 10 cellular providers, the orders are simply not coming in. If the tests, and product placement within the ranks of its competitors was compelling for these industry Cellular Giants?then so would the Sales Orders for Product?is the common sense view. With the exception of US Cellular (the next Item for this customer) the industry is NOT ADOPTING. The industry according to SCON did its testing 2 years ago in 1998. 4. The "SPECIAL" deal that US Cellular was able to get to buy the SCONs filters is very very profitable. Problem is that it's profitable for US Cellular and not SCON. Commercial revenue in the last reported quarter was $1,020,000, but the discounts/costs to US Cellular totaled $925,000 (warrant vesting & charges). So that leaves $95K coming into the company BEFORE any operating and manufacturing costs. That's a giving a single customer a 91% discount against the ENTIRE commercial product Sales. Isn't that SPECIAL? 5. Beware of the Cup and Handle. Posters on the Boards proclaim the stock will go up a new reason. The cheer lead the chart looks wonderful, and the stock will go up, but seldom can they explain why. 6. The Marketing and Sales Department spawns news of itself. The latest news to give SCON on a price boost was the reorganization of the marketing department to address the huge needs. That was this month?but for those of you paying attention, it nearly the same message to Investors on January 13, 1998 too. 7. The insiders and the all those Shares? Somehow, two Insider SCON officers just put in Initial Holdings Statements for a combined 12.9M shares, between the two of them. But float is 15M and 17.4 Outstanding. Huh? What the? TheTruthseeker is even scratching his head on this one. 8. Minuscule capacity: Here is where the Truthseeker's vast Manufacturing experience comes into play. None of the analysts are even looking at this. SCON spent quite some time and serious effort to expand its manufacturing capacity in 1998. The launch of a new 18,000 sqft facility. Many of the processes are in house, without ability of others suppliers to come in and support the Demand needs (if they were to present themselves.) Superconductors are after all, quite a specialized process. The stated capacity of this "new" facility is 1 unit per day, with hopes of going to 3 units per day by start of 99. Assuming they were able to optimize the factory floor, they can produce about 1000 filters per year, the Sales prices of a single filter is about $20,000 each. That is a total capacity of $20,000,000 of Sales per year. Without additional capacity in this highly specialized Superconductor arena, TheTruthseeker believes that this will be a limiting factor with regards to any potential Sales. Simply said, it appears SCON does not have near the plant capacity required to make the Sales projections. The numbers needed to justify the incredibly high market Capitalization in SCON are based on wildly optimistic projections. But if SCON does not have the Manufacturing ability to make more than 20M dollars of Sales per year, as the available data from the PRs and SEC documents would imply, well then, it would mean that SCON is physically unable to produce the amount of product they are in the Projections. THIS IS NOT A DOT COM WONDER WORLD! It WIDGETS! And if you cannot make them, you cannot sell them. TheTruthseeker will be updating this report shortly. Caveat Emptor, and if you cannot do that, remember the Truth is out there, but sometimes you have to Seek it out. The Truthseeker.