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Technology Stocks : Net Perceptions, Inc. (NETP) -- Ignore unavailable to you. Want to Upgrade?

To: John Liu who wrote (2544)	7/24/2000 6:47:25 PM
From: rupert1	Read Replies (2) \| Respond to of 2908

John: All the discussion is on Raging BUll. The CC has thrown up some interesting "facts" which we are trying to clarify. The CFO said the loss was 0.15 even though written reports refer to 0.16 cents. He then went on to say that without a big hit from giving up the lease on their old building and moving into a new building, the loss would have been 0.12 cents. As others have pointed out, that "loss" should have been taken in 3Q but for reasons not explained they have taken it in 2Q. Otehr important consdierations: - the new ASP delivery systems has gotten off to a very strong start: however, the new revenues did not show up in 2Q. This is a new stream of revenues and will be renewable. - Knowledge Management actually fell in revenues booked, but in reality there were a numebr of large orders. But KM requires a longer sales cycle - there has to be a pilot study before the win is announced and the big bucks are booked. There is a strong pipeline for this product. - the dot-coms all tightened their belts in 2Q. They had represented only 25% of NETP's revenue and the belt tightening will drive them to NETP products to help them be more efficient and cost effective. But in the meantime, revenues from them dropped a few percentage points. - they expected continued strong growth. They pointed out that their growth is organic accordign to the busienss plan whereas some of the growth of other companies with which they are compared get a large aprt of their growth from acquisitons made with shares. NETP continues to be interested in acquisitions. - apart from the lease and other special charges, cost are falling in relation to revenues and most of the financial indicators have improved.

To: John Liu who wrote (2544)	7/25/2000 12:26:10 AM
From: Carl R.	Respond to of 2908

My other comment is that their sales expense in relation to sales is normal, but their R&D is unusually high for a software company; at 39% of sales it is about 3 times the industry norm. That is surprising, but it does show two things. First of all, they expect to grow 3 times larger in the not too distant future, and second of all, they want to use their cash hoard to aggressively attempt to capture market share by having the best products. I am satisfied with this report, and will continue to hold. Good luck, Carl